Investors withdraw from bank stocks on concerns about loan growth

Shares of 13 banks fell 0.26% to 4.77% at 11:35 IST on BSE, on concerns higher interest rates may crimp loan growth.

The BSE's banking sector index Bankex was down 2.57% at 11,077.82. It underperformed the Sensex which was down 1.32% at 16,618.77. Bank of Baroda (down 4.77% to Rs. 754.90), IDBI Bank (down 4.50% to Rs. 107.15), Axis Bank (down 3.92% to Rs. 1127), ICICI Bank (down 3.79% to Rs. 876), Punjab National Bank (down 3.67% to Rs. 1004.10), Union Bank of India (down 3.03% to Rs. 257.40), State Bank of India (down 2.52% to Rs. 2119.95), Canara Bank (down 2.49% to Rs. 420.50), Yes Bank (down 2.48% to Rs. 282.55), Bank of India (down 1.73% to Rs. 315.55), IndusInd Bank (down 1.69% to Rs. 241.10), Kotak Mahindra Bank (down 1.61% to Rs. 438.65) and HDFC Bank (down 0.26% to Rs. 465.60) edged lower. India's largest private sector bank by net profit ICICI Bank hit a low of Rs. 866.50 so far the day, which is a 52-week low for the counter. India's largest bank by net profit and branch network State Bank of India hit a low of Rs. 2110.10 so far during the day, which is a 52-week low for the counter. State-run Bank of Baroda hit a low of Rs. 751 so far during the day, which is a 52-week low for the counter. Bank of India hit a low of Rs. 313 so far during the day, which is a 52-week low for the counter. Union Bank of India hits 52-week low of Rs. 257. Bankex underperformed the market over the past one month till 17 August 2011, declining 11.49% compared with the Sensex's 9.27% fall. The index had, however, outperformed the market in past one quarter, falling 6.51% as against 7.15% decline in the Sensex. Banks have raised lending rates over the past few days after the Reserve Bank of India (RBI) late last month raised its key lending rate by a steeper-than-expected 50 basis points at a policy review. Three top commercial banks, State Bank of India, ICICI Bank and HDFC Bank, last week, raised lending rates by half a percentage point.

Source:- IIFL PReMIA

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