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Banking shares continued to remain under pressure on the bourses with the Bank Nifty slipping for the fourth straight trading session.
State Bank of India (SBI), Bank of India, Bank of Baroda, Canara Bank, IndusInd Bank, Yes Bank and Punjab National Bank were down 1%-2% on the National Stock Exchange (NSE).
At 1331 hours, Bank Nifty was down 0.72% or 132 points at 18,317 compared with a marginal 0.01% fall in CNX Nifty. In past four trading sessions, the banking index dipped 4.3% against 1.55% decline in benchmark index.
The public sector banks (PSBs) index CNX PSU Bank has fallen 6% during the same period.
SBI, the largest loser among the index, was down 2% at Rs 269, its lowest level since November 2014 on the NSE.
Dena Bank, Dhanlaxmi Bank, Indian Overseas Bank and Uco Bank have hit their fresh 52-week low in intra-day trade today.
Ankit Ladhani analyst at Karvy Stock Broking expects the asset quality pains to continue for the next couple of quarters, especially for PSBs, led by higher exposure of the banking system to stressed sectors like mining, textiles, metals etc.
In- spite of an improved performance and earnings expected in FY16, lower tier I capital in the face of stronger credit growth as well as higher Capital Adequacy Ratio (CAR) requirements will be a major dampener for PSBs.
State Bank of India (SBI), Bank of India, Bank of Baroda, Canara Bank, IndusInd Bank, Yes Bank and Punjab National Bank were down 1%-2% on the National Stock Exchange (NSE).
At 1331 hours, Bank Nifty was down 0.72% or 132 points at 18,317 compared with a marginal 0.01% fall in CNX Nifty. In past four trading sessions, the banking index dipped 4.3% against 1.55% decline in benchmark index.
The public sector banks (PSBs) index CNX PSU Bank has fallen 6% during the same period.
SBI, the largest loser among the index, was down 2% at Rs 269, its lowest level since November 2014 on the NSE.
Dena Bank, Dhanlaxmi Bank, Indian Overseas Bank and Uco Bank have hit their fresh 52-week low in intra-day trade today.
Ankit Ladhani analyst at Karvy Stock Broking expects the asset quality pains to continue for the next couple of quarters, especially for PSBs, led by higher exposure of the banking system to stressed sectors like mining, textiles, metals etc.
In- spite of an improved performance and earnings expected in FY16, lower tier I capital in the face of stronger credit growth as well as higher Capital Adequacy Ratio (CAR) requirements will be a major dampener for PSBs.
Most of the PSBs are currently trading below 1x 1-year forward ABV and capital raising via equity for tier I capital will lead to further dilution and will lead to additional pressures on the already stressed ROEs of the banks, said analyst in report dated March 16, 2015.
