Bank stocks pose greater risks on higher 'beta' value. YES Bank, ICICI Bank and State Bank of India have higher 'beta' value on the NSE index, indicating that they carry more risks than the overall market.
High beta stocks are more volatile than the broader market and hence are riskier. Bank stocks have been battered recently due to defaults by Infrastructure Leasing & Financial Services (IL&FS) and RBI curtailing YES Bank CEO Rana Kapoor's term, which created uncertainty about its outlook.
Axis Bank and IndusInd Bank also have higher beta values. Bank Nifty index has fallen 10 per cent this month, compared with the broader index's decline of 5.6 per cent.