Bank indices ended in red on Thursday, as major bank stocks fell by more than 1% each. The Nifty Bank Index was down by more than 200 points. 10 out of 12 stocks had declined in value, dragging the index to end at 24,237.25. The BSE Banex was down by 195 points, with Kotak Mahindra Bank, Yes Bank and Indusind Bank registering declines of more than 1% each. HDFC Bank and State Bank of India have shed more than 0.75%. Bank of Baroda was the sole gainer in the BSE Bankex up by 0.82% at Rs 148.35.
Private sector lender HDFC Bank on Thursday joined the long list of lenders led by the State Bank of India which have cut interest rates on savings bank accounts. Major Banks have reduced the interest rates on savings bank accounts. SBI cut interest rates to 3.5% for deposits of Rs 1 crore and below. A savings account with Axis Bank will now earn just 3.5% for deposits up to Rs 50 lakhs. Yes Bank has cut rates by 100 basis points to 5% for accounts with balances below 1 lakh. For balances upto Rs 50 lakh, HDFC Bank has cut savings rate by 50 basis points to 3.5%. For balances between Rs 1 crore and 5 crores, a savings account with Kotak Mahindra Bank will now earn 5.5%, down by 0.5%.
Earlier this week, Sandip Bhatia, Head – India Equities, Macquarie Capital Securities, in conversation with ET Now, picked HDFC Bank, YES Bank and ICICI Bank from the financial services space. HDFC Bank’s performance in the year has been impressive as the stock is up by 47% in the year. Despite such stellar returns, Sandip believes that the Bank’s stock is attractive at these levels. The S&P BSE Bankex is up by 33% since January this year.