The Hindu Business Line : Banking stocks shed points on uncertainty

Mumbai, Sept. 29 Indian banking stocks fell substantially on Monday, as investors turned wary in the wake of happenings in the banking and financial sector globally.

The BSE-Bankex was the biggest loser among the sectoral indices on BSE, as it fell by more than six per cent.

The market is jittery about how vulnerable Indian banks are to the financial troubles in the US; this led to heavy selling in these counters, said Mr Abhishek Agrawal, Analyst, Angel Broking Ltd.

Biggest loser

ICICI slid 12 per cent on Monday, which also saw it at its 52-week low. It is down 22 per cent from a week ago, and 26 per cent from a month ago.

ICICI Bank was not only the biggest loser in BSE Bankex, in which it has a weightage of 27.38 per cent, but also in the Sensex, in which it has a weightage of 6.19 per cent. The benchmark index fell 3.87 per cent on Monday.

There was substantial selling pressure in ICICI as more than 60 per cent of its shareholders are FIIs, said Mr Agrawal.

When FIIs are unwinding their positions there will be more pressure on the stock, said Ms Anita Gandhi, Head-Institutional Business, Arihant Capital Markets Ltd.

Deutsche Bank Trust Company America has a 28.88-per cent stake in ICICI Bank, while Allamanda Investments has 7.61 per cent, Merrill Lynch holds 2.59 per cent, Government of Singapore has 1.61 per cent, Growth Fund of America owns 1.23 per cent, Dodge & Cox International Stock Fund has 1.16 per cent, Fid Funds Mauritius Ltd has 1.03 per cent and CLSA Mauritius holds 1.28 per cent stakes, according the shareholding pattern on the BSE as on June 30.

According to marketmen, the selling pressure in ICICI Bank stock triggered selling pressure on other banking stocks too, which dipped between 2 and 9 per cent.

Other losers

Among the other sectoral stocks, SBI fell 2 per cent, HDFC Bank lost 3.7 per cent and Punjab National Bank slid 2.6 per cent.

The smaller banking stocks recorded steeper declines: Karnataka Bank was down 7.09 per cent, Oriental Bank was down 8.11 per cent, Indus Ind Bank declined 7.09 per cent, Indian Overseas Bank lost 6.48 per cent, Yes Bank shed 6.42 per cent, IDBI Bank came down 5.18 per cent, Kotak Bank 4.97 lost per cent and Axis Bank declined 4.76 per cent.

There has been a growing level of interest in PSU bank stocks over private banks and the attitude of both customers and investors seems to be changing with a positive bias towards the former, said analysts.

The PSU banks are on safer ground compared to private banks as they have been following a more or less conservative approach, said the head of research of a broking firm.

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