Thirteen bank shares fell by 0.87% to 7.47% at 13:51 IST on BSE, extending recent losses after the Reserve Bank of India raised its main lending rate on Tuesday, 28 January 2014.
Bank of India (down 7.47%), Bank of Baroda (down 4.6%), Canara Bank (down 3.69%), Union Bank of India (down 3.52%), Federal Bank (down 3.49%), Yes Bank (down 3.27%), ICICI Bank (down 2.74%), Punjab National Bank (down 2.72%), State Bank of India (down 2.24%), HDFC Bank (down 1.94%), Axis Bank (down 1.43%), IndusInd Bank (down 1.21%) and Kotak Mahindra Bank (down 0.87%), edged lower.
The S&P BSE Bankex fell 2.43% at 11,647.37. It underperformed the S&P BSE Sensex, which was down 1.15% at 20,409.35.
The S&P BSE Bankex had underperformed the market over the past one month till 29 January 2014, falling 8.69% compared with the Sensex's 2.58% fall. The index had underperformed the market in past one quarter, sliding 6.97% as against Sensex's 1.35% fall.
The S&P BSE Bankex has fallen 9.02% in six consecutive sessions from a recent high of 12,801.43 on 22 January 2014.
The Reserve Bank of India (RBI) surprised markets by raising its main lending rate viz. the repo rate by 25 basis points to 8% after Third Quarter Review of Monetary Policy for 2013-14 on Tuesday, 28 January 2014. Consequently, the reverse repo rate under the LAF was adjusted at 7% and the marginal standing facility (MSF) rate and the Bank Rate at 9%. The central bank kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4% of net demand and time liability (NDTL).
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