Money on the markets

Banking stocks fall

Bank stocks corrected on Thursday and the banking index ended down 1.2 percent, as the overall market slipped on profit booking.

SBI and ICICI Bank closed down 0.2 percent and 2.3 percent respectively. HDFC Bank and mortgage lender Housing Development Finance lost 0.6 percent.

Yes Bank gained 1.3 percent in trade, the top bankex gainer, while IndusInd Bank slipped 3.6 percent and ended as top loser.

Will you buy these stocks at this stage?

Banking index slumps ahead of policy review

The BSE Banking Index closed 0.34 percent lower on Monday in a broader market that closed 1.08 percent down at 17,400 points.

Top lenders State Bank of India and ICICI Bank fell 0.7 percent and 0.2 percent respectively, a day ahead of the Reserve Bank of India (RBI) policy review.

A Reuters survey last week showed most economists expected the RBI to increase its key short-term borrowing and lending rates by at least 25 basis points.

Other stocks which led the decline were Oriental Bank, down 1.8 percent, Karnataka Bank which fell 2.8 percent lower, and Canara Bank, which dropped 2.5 percent.

Do you think it is the right time to invest in banking shares?

Banks lead Sensex rise

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?

Banking index drops after RBI move

The BSE banking index slid more than 1.8 percent on concerns bank profits would be hit after the RBI raised the provision ratio for bad debts on Tuesday.

The RBI on Tuesday asked banks to increase the minimum provision ratio for bad debts to 70 percent from 10 percent by September 2010.

Top private lender ICICI Bank, which has over 7 percent weightage in the 30-share sensitive index, slipped 3.1 percent to 810 rupees.

Shares in State Bank of India (SBI), which had their biggest fall in 10 weeks on Tuesday, gained 0.69 percent in today’s trade to 2218 rupees.

The BSE Realty Index ended 1.5 pct down, with the main losers being HDFC Bank (down 3.1 percent), Canara Bank (down 2.2 percent), Karnataka Bank (down 2.26 percent) and Axis Bank (down 2.4 percent).

Do you think banking stocks will fall further on RBI’s move?

Banking index drops

The BSE banking index dropped 1.2 percent on Wednesday in a broader market which ended flat.

The benchmark 30-share Sensex has more than doubled from the lows in early March, registering a rise of more than 78 percent with foreign funds infusing nearly $14 billion in Indian equities.

The BSE banking index on the other hand has risen nearly 90 percent in 2009.

Private lender ICICI Bank, which has a weightage of over 8 percent in the Sensex, dropped 1.6 percent to 928 rupees. The scrip has more than doubled since the start of this year.

The other Bankex stocks that declined were Bank of Baroda (down 4.4 percent), SBI (down 3.2 percent), HDFC Bank (down 1.6 percent) and Union Bank (down 1.2 percent).

Yes Bank today said July-Sep net profit had jumped 75.6 percent from the previous year. The stock ended 3.8 percent down at 244 rupees. The bank plans to raise $150-250 million via equity by March 2010 to meet expansion targets, a senior official said.

Do you think it is a good time to invest in this sector?

Market slides as budget disappoints

The Sensex plunged 5.8 percent on Monday as the higher-than-expected fiscal deficit announced by the government in the Union budget disappointed investors.

The 30-share sensitive index swung from an intra-day high of 15,097 to an intra-day low of 13,959 and closed 870 points lower at 14,043. The fifty-share Nifty ended 5.84 percent down at 4,165.

The fall in the benchmark was led by Reliance industries, ICICI Bank, L&T and HDFC.

On the sectoral front, the BSE Banking Index dropped 8.1 percent, followed by the Realty Index which ended 7.2 percent lower. However, the BSE FMCG Index closed 0.97 percent higher.

Reliance Infra was the benchmark’s biggest loser with the stock plunging over 12 per cent. The other big losers were ICICI Bank, JP Associates and Tata Steel, all down over 9 per cent.

The budget fell short of investor expectation as it did not include any significant policy changes. The populist budget instead focused heavily on increased borrowing and spending to aid farmers and the poor, pushing the fiscal deficit for the year ending March 2010 to a higher-than-expected 6.8 percent of GDP.

Do you think the government could have introduced more market-friendly reforms to boost investor sentiments?

Sensex gains in choppy trade

The stock market was choppy today as slipping Asian stocks and weak U.S. manufacturing data sparked profit-taking.

Asian stocks fell for a second day after weak U.S. factory data and news of record job losses in Europe raised concerns about the world economy.

The 30-share sensitive index swung from an intra-day high of 15,022 to an intra-day low of 14,621, and finally closed 82 points higher at 14,957. The fifty-share Nifty ended 0.75 percent up at 4517.

Higher advance tax payments (which indicate improved earnings) from top companies such as Reliance Industries and SBI also aided the Sensex’s intra-day recovery.

On the sectoral front, the BSE Banking Index gained 2.26 percent, followed by the Power Index which ended 1.92 percent higher. The BSE Oil & Gas Index ended lower at 0.98 percent.

FIIs sold net $44.5 million in shares and $34.5 million in debt.

Sensex gains in choppy trade

The Sensex fell more than 3 percent early on Tuesday paring yesterday’s gains, but got right back into action on strong domestic buying and closed 0.1 percent up with support from positive global cues.

The benchmark swung from 13,840 in early trade to an intra-day high of 14,930 and then closed at 14,302 on profit taking. The index had gained more than 17 percent on Monday. The Nifty declined to 4,318.45, down 4.7 points.

The rise in the benchmark was led by L&T, ICICI Bank, L&T and SBI.

On the sectoral front, the BSE Realty Index rose 12.8 percent, followed by the Banking Index which ended 6.8 percent higher. The BSE IT Index, however, ended lower at 10.1 percent on a firm rupee.

FIIs bought net $11.1 million in shares and $6.7 million in debt.

At this juncture, do you think the choice of candidates for key government posts will play a role in guiding the markets?

Sensex gains 1.5 pct; Maruti net drops

The Sensex ended the week on a positive note, closing 1.7 percent higher, as increased investor confidence helped boost sentiment.

The benchmark closed 194.06 points higher at 11,329.05 while the Nifty ended 1.6 percent higher at 3480.75.

The rise in the Sensex was led by Bharti Airtel, Reliance Industries and ICICI bank.

On the sectoral front, the BSE Banking index gained 2.7 percent. This was followed by the Consumer Durable index which was up 2.3 percent. All indices closed in positive territory.

Maruti Suzuki India, reported a 18.5 percent drop in quarterly net profit, missing forecast. Shares in Maruti ended 0.33 percent lower at 802.25 rupees.

Foreign direct investment (FDI) into India is expected to be at least $40 billion in the year to March 2010, a senior industry ministry official said.

The Sensex has now risen for the seventh week in a row. Do you think the upswing would also continue next week?

Sensex remains choppy despite rate cut

The BSE Sensex closed 0.74 percent lower on Tuesday, tracking weak Asian markets and a downward bias of growth forecast by the RBI.

The benchmark closed 81.39 points lower at 10,898.11, while the Nifty ended 0.35 percent down at 3,365.30. The Sensex fall was led by ICICI Bank, L&T, Infosys and SBI.

The Reserve Bank of India (RBI) in its latest policy review slashed its repo and reverse repo rates by 25 basis points each, but left the cash reserve ratio unchanged at 5.0 percent.

The central bank has moderated its growth forecast to 6 percent for the year 2009/10 from 6.5-6.7 percent.

On the sectoral front, the rate cuts could not help the banking stocks much, and the banking index lost nearly 2.8 percent. This was followed by the BSE Auto Index which was down 2.5 percent. However, the BSE Realty Index bucked the trend and gained 2.2 percent.

On the global front, Asian markets remained weak after news of mounting bad loans of Bank of America (which has received $45 billion of taxpayers’ money) raised further concerns of a global financial system.

The RBI, in its latest endeavour to shore-up growth, has brought down both its key policy rates, but will this force commercial banks to reduce lending and deposit rates that in turn can boost loan growth? Do you see another round of rate cuts in the offing?