SBI shares touch new peak in flat market

The shares of State Bank of India touched an all-time high today after foreign investors bought large blocks at a 15 per cent premium to the opening price on the Bombay Stock Exchange. The scrip rose as much as 5.2 per cent to Rs 976.90, before ending at Rs 954.60, up 2.8 per cent.

Limited by investment caps, foreign funds used a separate trading window to buy nearly 3.5 million SBI shares at Rs 1,070.

The shares of SBI's associate banks also rose sharply. State Bank of Bikaner & Jaipur rose 5 per cent to Rs 3,697.40. State Bank of Travancore rose 5 per cent to Rs 3,662.30. State Bank of Mysore rose 8.7 per cent to Rs 5,783.00.

Some other banking stocks also moved up. ICICI Bank rose 0.7 per cent to Rs 607.45 after it raised prime lending rates for corporate customers by 100 basis points.

UTI Bank rose as much as 18 per cent before ending at Rs 380.15, 5.9 per cent higher on market talk that the bank's founder, Specified Undertaking of Unit Trust of India, might sell part of its stake. SBI shares are trading at 10.2 times their forward earnings, while the benchmark BSE index trades at 18 times.

The broader market ended flat with the Sensex at 10,801.72 points, slipping off a new peak of 10,896.39 points, trading in a range of 135 points.

The 50-share S&P CNX Nifty dropped 0.23 per cent to close at Rs 3,195.35 points. Dealers said investors were wary of taking large positions ahead of a holiday.

Among other stocks, India Cements added 0.6 per cent to Rs 166.50 after its board approved an increase in investment by foreign institutional investors to 40 per cent of its share capital.

Tata Coffee firmed 2.4 per cent to Rs 389.40 after its board approved yesterday a rights issue of two new shares for every five held in a price band of Rs 220 to 260 per share.