The Hindu Business Line : Banking stocks lose ground on selling pressure

Mumbai, April 23 Banking stocks lost ground on Wednesday due to unrelenting selling pressure. BSE Bankex slipped 164.46 points or 1.89 per cent on Wednesday. The Banking index was weak throughout the day; it opened at 8750.63, which was also the intra-day high it touched, and closed at 8552.46.

The country’s second largest private sector bank HDFC Bank was the biggest loser among the 30 Sensex stocks. It dipped 3.01 per cent or Rs 44.80 to close the day at Rs 1,442.85. ICICI Bank and State Bank of India were also among the worse hit Sensex stocks. ICICI slipped 2.07 per cent and SBI dropped 2.10 per cent.

Market men say that State Bank of India shed Rs 36.30 on Wednesday after the Bank’s Chairman, Mr O.P. Bhatt, announced that the bank would be making a provision of $10 million towards its marked-to- market losses due to the sub-prime crisis abroad.

He also said that the bank’s clients’ exposure to foreign exchange derivative losses could be between Rs 600-700 crore, which would be accounted for on the customers’ books.

Share prices of both Oriental Bank of Commerce and Indian Bank plunged today at the bourses due to their poor quarter results, say analysts. Oriental Bank of Commerce announced a net loss of Rs 99.44 crore for the quarter ended March 31, 2008. The stock fell 3.55 per cent to end the day at Rs 194.45. Indian Bank toppled on flat quarter results. The state-run bank reported quarter-on-quarter net profit of 2.70 per cent. Indian Bank plummeted 7.05 per cent. The stock closed at Rs 145.10, which is a 9.34 per cent dip from what it was a week ago.

Among the other banking stocks, Axis Bank fell 1.47 per cent, Federal Bank dipped two per cent, Union Bank dropped 2.53 per cent and Bank of Baroda shed 2.14 per cent.

Ms Anita Gandhi, Head of Institutional Business at Arihant Capital Market Services, said one of the reasons the banking index took a beating today could be because of the futures and options expiry, which will happen tomorrow. “There is some fair amount of profit booking taking place in the banking counter due to the expiry of the stocks in the F&O segment,” Ms Gandhi said.

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