Investors withdraw from bank shares as bond yields rise

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MAY JOIN RACE FOR SHELL'S EUROPEAN REFINERIES: SOURCES
SENSEX, NIFTY UP 1% EACH FOR THE WEEK
CNX MIDCAP INDEX UP 1%, BSE SMALLCAP INDEX UP 1.6%
METAL INDEX UP 3.7%, AUTO INDEX UP 2.3%, FMCG UP 1.5%
INDEX GAINERS: SUZLON UP 9.3%, TATA STEEL UP 6.3%, SAIL UP 5.3%
RIL SPOKESPERSON TO NDTV: 'REVIEWS CANNOT ASSURE TRANSACTIONS'
RIL SPOKESPERSON: 'WE ARE REVIEWING A NUMBER OF GLOBAL OPPORTUNITIES'
ESSAR-SHELL IN EXCLUSIVE NEGOTIATIONS TILL NOV 30 TO BUY 3 SHELL REFINERIES
APPROACHED SHELL FOR BUYOUTS BEFORE ESSAR'S EXCLUSIVE TALKS BEGUN
JSW ENERGY ALSO IN RACE FOR ANDREW YULE'S DPSC STAKE: NW
CESC, SREI INFRA IN RACE FOR ANDREW YULE'S DPSC STAKE: NW
GAMMON INFRA BAGS NHAI PROJECT WORTH RS.850 CRORES
NET PROFIT AT RS.48.2 CR VS RS.12 CR; SALES UP 55% AT RS.849 CR (YOY)
PROFIT UP 55% AT RS.143.50 CR; NET SALES UP 22.5% AT RS.2234.20 (YOY)
IMPORTING SUGAR BEING REVIEWED; NEED FOR ECONOMIC PRICING OF SUGAR
IN DISCUSSIONS WITH FARMERS TO COME AT PRICE COMFORTABLE FOR BOTH SIDES
TOO EARLY TO TALK OF DENA BANK MERGER WITH ANOTHER PSU BANK: NW
KEEPS OVERNIGHT LENDING RATE UNCHANGED AT 0.1%
STILL SEE DOWNSIDE RISK FOR THE ECONOMY
AIM TO CONVERT NON USERS TO USERS WITH THE HELP OF ROAMING TARIFF CUTS
PREFER TO REMAIN AGGRESSIVE WITHOUT GETTING INTO A PRICE WAR
MURTAZA KHORAKIWALA TO NDTV: CANNOT COMMENT ON SUB JUDICE MATTER
WOCKHARDT TO PAY BACK ALL SECURED, UNSECURED LOANS IN 5 YRS AS PER CDR
DBS TOP BRASS MET HABIL KHORAKIWALA TO DISCUSS WAYS OF SETTLEMENT: SRCS
EYEING TO SETTLE PAYMENT DEFAULT CASE OUT OF COURT: SOURCES
ALERT: ROAMING CONTRIBUTES 15% OF BHARTI REVENUES
ROAMING CALLS ON OTHER NETWORKS AT 80 PAISE/MINUTE
ROAMING CALLS ON OWN NETWORK AT 60 PAISE/MIN
SWAP TO REDUCE OVERALL FINANCE CHARGES FOR THE COMPANY: CFO
COMPLETES SWAP OF $875MN FOREX CONVERTIBLE BONDS

Updated: 12/06/2009 | 12:00 AM IST

Banking

Capital Market

Friday, June 12, 2009 (New Delhi)

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The BSE Bankex was down 2.04% at 8,045.54. It underperformed the BSE Sensex, which was down 1.25% at 15,218.81

State Bank of India (down 3.32%), HDFC Bank (down 1.40%), ICICI Bank (down 0.87%), Bank of India (down 2.86%), Kotak Mahindra Bank (down 3.26%), Punjab National Bank (down 2.49%), Axis Bank (down 0.93%), and Indian Overseas Bank (down 1.79%), declined

Bond yield rose to a two-month high today, 12 June 2009 after an unexpected rise in industrial output in April2009 from a year earlier, suggesting the economy is turning around faster than expected.

At 12:56 IST, the yield on the benchmark 10-year bond was at 6.94%, the highest since 8 April 2009, from 6.88% before the data. It had ended at 6.89% on Thursday. The yield on the most traded 6.07% bond maturing in 2014 was at 6.64%. It rose to 3 basis points to 6.69% after the data was released. It had ended at 6.63% in the previous session.

Bond yields and bond prices are inversely related. Industrial production rose 1.4% in April 2009 compared to an upwardly revised 0.75% fall in March 2009, government data released today, 12 June 2009 showed. Manufacturing production rose 0.7% in April 2009.

Interest rates in India are falling thanks to ample liquidity in the banking system, low headline inflation and a loose monetary policy stance of the Reserve Bank of India. However, inflation may rise if oil and metal prices which have risen sharply in 2009 continue to rally.

Finance minister Pranab Mukherjee on Wednesday said banks should provide credit at reasonable rates to spur growth, saying cuts in official rates by the Reserve Bank of India had not been passed on. This will help restore the environment for rapid growth and ensure that the growth process benefits, he said.