Investors withdraw from bank shares as bond yields rise

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SMS BOS < SPACE > MF, MUTUAL FUND QUERY AT 56388
COS GETTING FRESH FDI IN SECTORS WHERE FDI CAPS HAVE GONE UP: SOURCES
NEW NORMS TO CONSIDER TOTAL FOREIGN INVESTMENT NOT TOTAL INVESTMENT: SRCS
CCEA NOD NEEDED ONLY FOR INVESTMENTS OF RS.1200 CR AND ABOVE: SOURCES
GOVT TO EASE NORMS FOR FDI REQUIRING CABINET APPROVAL: SOURCES
NO PLANS TO OFFER HOME LOANS AT 8%: NW
OCTOBER UNEMPLOYMENT RATE RISES TO 10.2% VS 9.8% (MOM)
EMPLOYERS CUT PAYROLLS BY 190,000 IN OCTOBER VS ESTIMATE OF 175,000
FOREIGN FUNDS NET BUY RS.587.02 CR IN EQUITIES ON NOVEMBER 6 (PROVISIONAL)
DOMESTIC FUNDS NET BUY RS.236.62 CR IN EQUITIES ON NOVEMBER 6 (PROVISIONAL)
KINGFISHER RAISES FUEL SURCHARGE BY RS.200 ON SECTORS MORE THAN 1000 KM
KINGFISHER RAISES FUEL SURCHARGE BY RS.100 ON SECTORS UPTO 1000 KM
JET AIRWAYS RAISES FUEL SURCHARGE BY RS.100-150 ON SECTORS UPTO 1000 KM
NET PROFIT AT $455 MN VS LOSS OF $24.6 BN (YOY)
TOTAL REVENUES AT $26.05 BN VS $898 MN (YOY)
MUTUAL FUNDS NET BUY RS.34.3 CR IN EQUITIES ON NOVEMBER 5
FOREIGN FUNDS NET BUY RS.267.6 CR ($56.8 MN) IN EQUITIES ON NOVEMBER 5
OVER 7% GROWTH ACHIEVABLE IN FY'11
TO EXPLORE STIMULUS EXIT MODE NOW; WINDING DOWN STIMULUS TO CUT DEFICIT
SENSEX UP 1.65%, NIFTY UP 1.8% FOR THE WEEK
CNX MIDCAP INDEX UP 3.9%, BSE SMALLCAP INDEX UP 1.6%
BSE PSU INDEX UP 4.77%, REALTY UP 4.4%, METAL INDEX UP 4%
INDEX GAINERS: BHARTI UP 9.4%, JP ASSOCIATES UP 8.6%, IDFC UP 7%
GETS U.S. FDA NOD FOR GENERIC ACULAR
TO RAISE UPTO $300 MN VIA FCCBS
EXTENDING 8% HOME LOAN SCHEME TILL 31ST MARCH , 2010
INDIAN RAILWAYS SHOULD RATIONALISE PASSENGER FARES UPWARD
TO RAILWAYS: STOP CROSS SUBSIDISING FARES AND FREIGHTS
IMPOSES 20% SAFEGUARD DUTY ON IMPORT OF SODA ASH
ROAD DEFICIT REMAINS THE GREATEST PROBLEM IN INFRASTRUCTURE IN INDIA

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.