The Hindu Business Line : Bankex shares drift lower in the last hour of trade

Mumbai, April 10 Bank stocks came under selling pressure once again towards the close of the trading session on Thursday with BSE Bankex falling by nearly three per cent — the highest fall among the sectoral indices on the BSE.

The BSE Bankex index fell by 2.94 per cent as the both major private sector and public sector bank shares drifted lower in the last hour of trade, giving up the 3.01 per cent gain in the previous session.

The bank stocks have been under pressure ever since the Finance Minister announced the Rs 60,000-crore farm loan waver in the Union Budget, followed by reports of ICICI Bank’s marked-to-market losses in its overseas derivative exposure.

Meanwhile, a result preview research report from Religare said that banks are among the key sectors witnessing downward revision, and ICICI figured among the key index stocks that would be negatively affected by the estimate.

Growth outlook

“This year (FY08) growth in the banking sector may moderate to around 20 per cent as compared to 30 per cent last year,” Mr Kshitiz Prasad, banking analyst with the broking firm Anand Rathi, said.

ICICI Bank, which has maximum weightage on the BSE Banking index, fell by 4.25 per cent on Thursday.

“Fundamentals had not changed overnight; yesterday, the banking stocks were up by 3.01 per cent, probably it is speculation that is driving the stocks up and down,” said Mr Prasad.

“However, there is moderation in credit growth to 22 per cent as compared to 28 per cent last year. The housing loan may be slowing down marginally. Also, there are some quantitative concerns on some private sector banks selling exotic products to the SMEs,” he said.

Inflation

“The inflation numbers, which are expected on Friday, were a concern but not so much as it has been growing due to food prices and it’s a supply-driven concern,” Mr Prasad added.

Other big losers were HDFC Bank (3.67 per cent), SBI (1.87 per cent), Axis Bank (2.36 per cent), Kotak Bank (3.43 per cent) and Punjab National Bank (2.33 per cent).

Oriental Bank of Commerce and Allahabad Bank bucked the trend, and they were up by more than one per cent.

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