The BSE Bankex opened the day at 7,340.54 points and touched an intra-day high of 7,434.52 points. However, due to profit booking, the index ended the day in the red, closing at 7,260.09 points losing 32.69 points or 0.45%.

Sarika P Lohra, banking analyst, Angel Broking, said, “The market was expecting a hike in reverse repo rates. But that did not happen. And the raise in the repo rates will be active only when there is a liquidity problem. The banks that have more exposure to retail lending have pulled the banking stocks down.”

She further added, “The risk weightage on certain asset class has increased and banks will have to revise their risk weightage on certain asset classes. As a result of this the provisioning is going to be higher, and that might affect their profitability.”

A Banking sector analyst from the domestic brokerage said, “The 25 bps hike in repo rates was less than the worst fears of the market, and is more a signal of rising costs for the banking industry, than necessarily squeezing credit to industry.”

Among the Bankex stocks, HDFC Bank had its head held high gaining 1.84% or Rs 19.45 to close at Rs 1,078.15. Among public sector banks (PSBs), the State Bank of India (SBI) closed the day at Rs 1, 138.05, losing 1.50% or Rs 17.35. ICICI Bank lost 1.60% or Rs 15.25 to close at Rs 940.50.

UTI bank gained 5.97%, Indian Overseas Bank gained 2.16% and Andhra Bank gained 2.92%. But Centurion Bank of Punjab lost 4.51% and Canara Bank lost 2.11%.