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Banks lead Sensex rise

December 22, 2009


BSE Banking Index ended 1.16 percent higher on Tuesday powered by gains in India’s top private lender, ICICI Bank which contributed most of the rise.

Shares in ICICI Bank, (up 1.9 percent), SBI, (up 0.9 percent), Yes Bank, (up 4.3 percent), Kotak Mahindra Bank, (up 2.04 percent) and Axis Bank, (up 1.34 percent).

HDFC Bank and Karnataka Bank remain in negative territory.

The Banking Index rose over 70 percent in 2009 alone while for the month of December it posted a negative return of over 3 percent.

Analysts expect the Reserve Bank of India (RBI) to tighten policy as early as this month, starting with a hike in banks’ cash reserve requirements followed by interest rate rises.

Do you think this is the right time to invest in banking shares or will the Index go further down post a possible rate hike?

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