Money on the markets

Bank stocks post healthy gains

It was a good trading session for banking counters, with the BSE banking index gaining more than 2 percent and ending as the top sectoral gainer, as fund managers bet the sector would benefit from a booming domestic economy.

Shares in Bank of India gained 5.4 percent to end as the top Bankex gainer, followed by IDBI which gained 4.3 percent.

Among bigger players, ICICI gained 2.5 percent, HDFC Bank was up 2.6 percent, and SBI jumped 3 percent, boosting the Sensex which ended 133 points higher.

Since July, the banking index has gained 20.6 percent. Would you invest in this space right now?

Banking stocks shine in weak market

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?

Sensex H1 performance

India’s benchmark stock index did reasonably well in the first half of 2010 as compared to its emerging market peers. The Sensex gained 1.4 percent during the period, and outperformed China’s Shanghai Composite Index and Brazil’s Bovespa which declined 9.6 percent and 26.8 percent respectively.

Shares in Reliance Industries, India’s top listed firm which has the heaviest weight in the index, barely changed during the period, but a Supreme Court ruling on a gas dispute and Ambani brothers reconciliation kept the company in focus.

Banking stocks performed well during the period, with the sectoral Bankex posting gains of more than 7 percent. Shares in SBI, India’s largest lender rose marginally, but private lender HDFC Bank jumped 12.6 percent during the period.

Among other sectors, oil & gas index rose 3.85 percent whereas the realty index was battered and posted losses of 17 percent.

Foreign funds have pumped in $6.7 billion in Indian equities so far in 2010, after investing a record $17.5 billion in 2009.

Rakesh Rawal, head of private wealth management at Anand Rathi said that if things turn better overseas, he expects the Sensex to touch 21,000 (points) by the year

Banking counters under pressure

Various banking stocks were under pressure on Monday on concerns the Reserve Bank of India (RBI) would further hike interest rates.

The Bankex closed down 0.84 percent with 12 of 17 components in red.

Allahabad Bank and Bank of Baroda were the worst performers in the index, losing over 3 percent. Bigger players like ICICI Bank dropped 1.2 percent while SBI slipped 0.7 percent in trade.

Five stocks in the index including private sector lender HDFC Bank ended the day in green.

The RBI had hiked its short term borrowing rates on March 19 and the central bank is expected to increase rates further in April, according to a Reuters poll.

The earning season kicks off on Tuesday. In such an environment, would you place your bets on banking stocks?

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?

Banks slide

The BSE banking index ended 2.9 percent lower on Tuesday, making it the top sectoral loser of the day.

Concerns over higher-than-expected inflation for November triggered worries the Reserve Bank of India may start tightening liquidity soon.

The fall in the Bankex was led by Andhra Bank (down 5.3 percent), Allahabad Bank (down 4.3 percent) and Indian Overseas Bank (down 3.7 percent).

Second-largest lender, ICICI Bank, ended 2.9 pct lower at 825 rupees.

Shares of SBI ended 3 percent lower with volumes of over 8,70,000 shares. The bank has paid 17.95 billion rupees as Oct-Dec advance tax.

The Bankex has risen over 70 percent for the year so far and over 3 percent since November.

Banking Index gains

The BSE Sensex posts its first weekly gain in three weeks helped by India’s top lender SBI and Sensex heavyweight ICICI Bank. Shares in SBI ended 3 percent higher at 2204 rupees posting its biggest rise in three weeks, while ICICI Bank which holds over 7 percent weightage in the 30-share Sensitive index ended 0.48 percent to 848 rupees.

The BSE Banking Index ended 1.7 percent higher on Friday while for the year it has gained over 70 percent.

Other gainers included were Yes Bank (up 6 percent), Kotak Mahindra Bank (up 5.98 percent), HDFC Bank (up 0.77 percent) and Bank of India (up 3.4 percent)

Banks gained after Standard and Poor’s statement which came yesterday that banks stands to gain more than to lose after RBI provisioning requirement to tighten provisioning norms.

Do you think banking stocks are a safe bet and will gain in near future?

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?

Mixed day for banking stocks

The BSE banking index ended marginally lower on Wednesday as the Sensex slipped over 150 points, but some banking stocks still managed to post decent gains.

Leading the pack was Indian Overseas Bank which jumped over 7 percent, and Federal Bank which gained 3.1 percent. Bigger peers like SBI and ICICI ended the day in the red.

Nine of the 18 components in the banking index managed to close positive.

The banking index has gained over 100 percent since April, with stocks such as ICICI surging over 150 percent and SBI rising 100 percent in the period.

Banking stocks have risen recently on higher advance tax payments by banks and a correction in valuation of small banks.

Which banking stock would you invest in right now?

SBI shares gain over 4 pct

Shares of India’s biggest bank, State Bank of India (SBI), gained over 4 percent on Tuesday and ended as the top gainer in the banking index.

SBI’s chairman said that earnings of the bank are seen rising 30-35 percent in the current quarter, with retail loans growing at about twice the pace from the year earlier.

The banking index, which ended just 0.4 percent higher, has gained over 90 percent since April.

Shares in SBI closed at 1894 rupees, and have gained 78 percent since April. In terms of returns, India’s top private sector bank ICICI has outperformed SBI with a return of 138 percent during the same period.

But some of its smaller peers have generated eye-popping returns. Yes Bank, for instance, has gained 245 percent since April, while Allahabad Bank has jumped 152 percent.

After this surge, would you now be keen to invest in banking stocks?