Business Daily from THE HINDU group of publications
Tuesday, Apr 01, 2008
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Tuesday, Apr 01, 2008 ePaper | Mobile/PDA Version |
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Banking Markets - Stocks
Our Bureau Mumbai, March 31 Stocks in the banking sector took a severe hit on Monday, leading the market fall. The BSE Bankex was down a 5.89 per cent, sliding more than the Sensex which declined by over 4 per cent. In the bear run in the recent weeks, the BSE-Bankex index has been the hardest hit; it has shed close to 2400 points in the last one month. Inflation figures are a big cause for worry for the banking sector as a whole, said analysts. Inflation has shot up to 6.68 per cent, its highest in more than a year. “With such high inflation figures, the chances of a reduction in the interest rates have become even less. The buzz in the market is that this might lead the RBI to hike the CRR rate to curb inflation,” said Ms Anita Gandhi, Head Institutional Business, Arihant Capital Markets. Another reason, marketmen said, is that the cues for growth in the fourth quarter for banks seem weak. “In the third quarter, the banks declared good profits, but we will see a reversal of that in the fourth quarter. Also banks could face some amount of margin pressure,” said a banking analyst with a broking firm. Over all, market watchers say that in the short-term at least, things look quite bleak for banking sector stocks. “But in the long run things would be better, as these scrips have gone through a lot of correction in the recent bear run. “This will definitely lead to valuations looking more attractive in this sector,” said the head of research at a brokerage. The frontline losers in the Bankex today were Bank of India, which plunged 7.11 per cent, ICICI Bank, which plummeted 7.79 per cent, YES Bank, which tanked 7.61 per cent and Kotak Mahindra Bank, which dipped 6.35 per cent. Among the other banking stock that took a beating today were Bank of Baroda (5.77 per cent), HDFC Bank (5.79 per cent), State Bank of India (4.51 per cent) and Centurion Bank of Punjab (5.76 per cent). More Stories on : Banking | Stocks
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