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  1. Bank Nifty plunges 413 pts to 19,334 pts; Axis Bank share price down 3 pct

Bank Nifty plunges 413 pts to 19,334 pts; Axis Bank share price down 3 pct

With the improving labor market in US fueling fears of a US Fed rate hike as early as June, banking stocks were trading 0.4%-3% lower on Monday.

By: | Mumbai | Published: March 9, 2015 12:56 PM
NSE Nifty, BSE Sensex, US labor market, banking stocks, Axis Bank, ICICI Bank, Kotak Bank, Yes Bank, SBI Bank, US Fed, Market today With the improving labor market in US fueling fears of a US Fed rate hike as early as June, banking stocks were trading 0.4%-3% lower on Monday. (Reuters)

With the improving labor market in US fueling fears of a US Fed rate hike as early as June, banking stocks were trading 0.4%-3% lower on Monday.

The Bank Nifty was trading 2% or 413.5 points lower at 19,334.5 points at 12:00 pm IST. The BSE benchmark Sensex was trading 1.3% or 370.66 points lower at 29,078.29 points, while NSE’s Nifty was trading 1.3% or 118.2 points lower at 8,819.55 points.

Experts attribute the correction in banking stocks to profit-taking. “In the last few weeks banking stocks have run-up a lot. Most banks have been trading 3-3.5-times their book value. Markets have fallen today as concrete signs of economic recovery are yet to be seen. Our, stance is that it will take at least another 2 quarters before the economy starts recovering,” said B Gopkumar, Executive Vice-President and Head (Broking) at Kotak Securities.

Among banking stocks, Axis Bank (-3%), ICICI Bank (-2.8%), Kotak Bank (-2.5%), Yes Bank (-2.4%) and SBI (-0.6%) were trading lower.

Market observers believe rate-hike by the US Fed could weaken the Rupee, but don’t see a direct impact on the banks. “If interest rates are raised, it could lead to FII outflows, which would have a negative impact on the currency. However, we don’t see banks getting directly impacted by the hike,” said Rikesh Parikh, vice-president Institution Corporate Broking, Motilal Oswal Financial Services. The Rupee was trading 0.47 paise lower at 62.62 against the dollar.

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