With shares of three of the largest private sector banks, which are under a cloud over allegations of money laundering, coming under sustained selling pressure, the Bank Nifty was under continued pressure through most of the day on Friday, ending with a loss of about 190 points at the close.

The three bank stocks--ICICI Bank, HDFC Bank and Axis Bank-managed to recover from the day’s low at the close of trading. But the interest stoked by the controversy in the wake of an undercover operation by an online magazine Cobrapost.com led a huge interest in all the three counters that cumulatively witnessed a trading volume of 1.40 crore shares.

ICICI Bank stock was the biggest loser in terms of value shedding Rs 41.30 to close at Rs 1,069.35 on the NSE with a trading volume of about 70.88 lakh shares. At one time, the stock was down to Rs 1,056 but managed to claw back later. It has come off the yearly high of Rs 1,232 it had touched on January 31 this year but is far above the 52-week low of Rs 767.40 on June 4 last year. The counter recorded a trading volume of 70.88 lakh shares.

Axis Bank stock lost Rs 11.65 to end the day at Rs 1,341.10, with about 33 lakh shares having been traded. This stock also had gained substantially over the year after falling to its 52-week low of Rs 922 on May 18 last year to hit a high of Rs 1,516.05 on January 30, 2013.

HDFC Bank stock (face value Rs 2) was down by Rs 8.45 at Rs 640.80 with about 38.58 lakh shares changing hands. This stock also is off its 52-week high of Rs 705.50 it had touched on November 30, 2012, and way above its yearly low of Rs 482.20 it fell on May 23 last year. This share also managed to pull back from its day’s low of Rs 633.80.

It is true that the shares of the three major private banks now under the scanner do not appear to be in any imminent danger of cracking further. All the three have said that they would get to the bottom of the issue. But the pressure on their stocks had an impact on Bank Nifty that shed about 190 points at the day’s close.

Two other private banks -YES Bank and IndusInd Bank-also ended the day in the red. While YES Bank lost Rs 11.55 to close the day at Rs 473.20, IndusInd Bank was down by Rs 11.15 at Rs 420. PNB, BoB and Canara Bank also were down, albeit marginally.

However Kotak Mahindra Bank, Union Bank of India, BoI and the SBI ended the day in the green. In fact, shares of SBI, which had dipped to a low of Rs 2,237.50, made a strong pull back to close at Rs 2,262.65, a gain of Rs 7.60, which probably helped cushion the index fall.

(This article was published on March 15, 2013)
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