Money on the markets

A maturing market amid the mayhem

Banking stocks shine in weak market

August 17, 2010

The BSE Banking Index outperformed other indices on Tuesday, gaining nearly 1 pct in a flat Mumbai market, with stocks like Bank of Baroda and IDBI posting good gains.

Optimism over loan demand in a growing economy is helping banking stocks, but rising interest rates is a concern as this could push up costs for manufacturers and tighten their margins.

Shares in Bank of Baroda surged more than 6 percent while IDBI gained 4 percent.
Among the bigger players, ICICI ended marginally higher while top lender SBI ended flat.

ICICI said it was raising its lending rates from Wednesday, following market leader State Bank of India’s similar move.

Do you think banking stocks offer good investment opportunity at this stage?

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