Bank stocks capitalise on fall in headline inflation

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FOREIGN FUNDS NET SELL RS.463.89 CR IN EQUITIES ON NOVEMBER 20 (PROV)
MUTUAL FUNDS NET SELL RS.176.7 CR IN EQUITIES ON NOVEMBER 19
DII'S NET BUY RS.18.46 CR IN EQUITIES ON NOVEMBER 20 (PROV)
TO ENTER INTO CUSTOMIZED MOTOR CYCLE BIZ VIA PRO-BIKING SHOWROOMS
TO EXPAND PANTNAGAR CAPACITY TO 70,000 UNITS IN NEXT FEW MONTHS
AKER IS A NORWEGIAN SERVICE PROVIDER CO FOR OIL AND GAS OPERATIONS
AKER SOLUTIONS TO PROVIDE SUPPORT SERVICES IN KG BASIN
AKER BAGGED SUB SEA PRODUCTION ORDER FROM RIL IN 2006 ALSO
RELIANCE IND PLACES RS.115 CR ORDER WITH NORWAY'S AKER SOLUTIONS
PORTING CHARGES TO BECOME APPLICABLE FROM DECEMBER 31, 2009
MNP ALLOWS USERS TO CHANGE OPERATORS WHILE RETAINING MOBILE NOS
USERS TO PAY MAX OF RS.19 TO CHANGE OPERATOR WHILE RETAINING OLD NUMBER
TRAI COMES OUT WITH NUMBER PORTABILITY CHARGES
PUNJAB NATIONAL BANK PLANS TO RAISE RS 700 CR BY SELLING BONDS
TATA TELE-QUIPPO OFFERING BETTER SERVICING DEAL FOR TOWERS: SOURCES
GTL BID 10-15% HIGHER THAN TATA-QUIPPO: SOURCES
DEAL VALUED AT AROUND RS.6000 CR : SOURCES
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%
APPROACHED SHELL FOR BUYOUTS BEFORE ESSAR'S EXCLUSIVE TALKS BEGUN
ESSAR-SHELL IN EXCLUSIVE NEGOTIATIONS TILL NOV 30 TO BUY 3 SHELL REFINERIES
RIL SPOKESPERSON: 'WE ARE REVIEWING A NUMBER OF GLOBAL OPPORTUNITIES'
RIL SPOKESPERSON TO NDTV: 'REVIEWS CANNOT ASSURE TRANSACTIONS'
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)

Updated: 09/07/2009 | 12:00 AM IST

Banking

Capital Market

Thursday, July 09, 2009 (New Delhi)

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At 13:19 IST, the BSE Bankex rose 0.29% to 7,507.43. It underperformed the Sensex, which was up 0.45% to 13,830.76

Punjab National Bank (up 1.70%), IDBI Bank (up 0.42%), State Bank of India (up 2.27%), Bank of Baroda (up 3.58%), Bank of India (up 4.69%), Canara Bank (up 2.79%), Indian Overseas Bank (up 2.46%), ING Vysya Bank (up 10.51%), HDFC Bank (up 1.34%), and Vijaya Bank (up 1.25%), rose.

The BSE Bankex outperformed the market over the past one month till 8 July 2009, declining 4.54% as compared to the Sensex's 8.98% fall. However it outperformed the market in the past one quarter, advancing 52.29% as compared to the Sensex's return of 27.45%.

Inflation based on the wholesale price index declined 1.55% in the year to 27 June 2009, compared with the previous week's annual decline of 1.3%, government data showed today, 9 July 2009. The annual inflation rate was 12.03% during the corresponding week of 2008. However, the government revised upwards WPI for week ended 2 May 2009 to 1.48% from 0.48%.

Analysts say that last week's increase in petrol and diesel prices may rekindle inflation pressures in coming months. Consumer price inflation also remains high.

Interest rates are falling thanks to ample liquidity in the banking system, negative headline inflation and a loose monetary policy stance of the Reserve Bank of India.

Bank stocks witnessed a sell-off this week after the government did not announce any sops for the banking sector in the Union Budget 2009-201. Banks were anticipating to get tax relief on interest earned on infrastructure lending in the Union Budget 2009-2010.

Further, the Finance Minister was silent on raising foreign investment (FDI) limit in insurance firms to 49% from 26%. Market men had anticipated a hike in FDI ceiling in the Budget