Marching ahead: Following the surprise reserve ratio cut by the RBI, Bank Nifty Index which tracks top banks, rallied 6.7 per cent last week. The total returns of this index from December lows is now 47 per cent. This is a 20 percentage points outperformance over the bellwether Nifty index. Even as the asset quality pressures haven’t abated, attractive valuations, cut in cash reserve ratio this year and a small policy rate cut were enough to drive the prices of bank stocks. However, the rally was completely dominated by private banking stocks, mainly ICICI Bank, which gained 63 per cent. — Reuters
(This article was published in the Business Line print edition dated September 23, 2012)
