Stress in Banking Sector to Continue: Geojit Financial Services

VK Vijayakumar, Chief Investment Strategist - Geojit Financial Services

"RBI, which has been proactive in recent times, has risen to the occasion by advancing the policy meet to cut policy rates by 40bp. Also, the unequivocal statement that monetary policy will continue to be accommodative till growth revives sends positive signals. The fact that the central bank has refrained from giving a GDP growth figure is a reflection of the complexity in giving projections with the present growth models. Extension of the moratorium announced earlier by another 3 months is a relief. A takeaway from the policy announcement is that the stress in the banking sector will continue."

Deepthi Mathew - Economist - Geojit Financial Services

"By cutting the repo rate and reverse repo rate, RBI aims to inject more liquidity into the system. However, more importantly, what is needed is to remove the risk averse as there is substantial liquidity in the banking sector. The rising food inflation rate could be a challenge to the RBI as it is following the inflation targeting regime. Similarly, the extension of the moratorium would bring in some relief to the borrowers, but it can put pressure on the bank's balance sheet."

Shares of Geojit Financial Services Ltd was last trading in BSE at Rs.19.45 as compared to the previous close of Rs. 19.55. The total number of shares traded during the day was 3852 in over 32 trades.

The stock hit an intraday high of Rs. 19.55 and intraday low of 19.2. The net turnover during the day was Rs. 74770.

Source : Equity Bulls

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