Bank stocks battered

Written by Markets Bureau | Mumbai Jan 29 | Updated: Jan 30 2008, 06:00am hrs
The banking sector stocks were severely battered on Tuesday as investors booked profits in these stocks after the Reserve Bank of India (RBI) kept the key rates unchanged at the end of its review of its monetary and credit policy for the third quarter ended in December 2007.

The heavy weight stocks from the sector such as the State Bank of India (SBI), ICICI Bank Ltd and HDFC Bank Ltd lost 3.58%, 4.19% and 3.36% respectively. These three banks taken together command weightage of 19.04% in the benchmark Sensex while in the BSE Bankex, these three stocks account for over 70% of the total weightage. The BSE Bankex lost 400.80 points or 3.48% before closing at 11,120.42 points.

Experts believe that with no change in the key rates, interest rate sensitive sectors like auto, banking, realty are going to have tough time in the short run. Even the BSE Realty index lost 288.34 points or 2.70% to close at 10,401.07 points.

Anita Gandhi, head of research, Arihant Capital Markets said Anticipating a rate cut from the RBI had seen some positive movements in these stocks in the last few trading sessions but as the rate cut did not materialise, investors booked profit in these stocks at higher levels. Markets are going to remain volatile ahead of the F&O expiry on January 31.