 "Nifty Bank index hits 52-week low")
Shares of banking shares were under pressure with the Nifty Bank index hitting fresh 52-week low of 13,566 on the National Stock Exchange (NSE) in intra-day trade today.
At 03:07 PM, Nifty Bank index was down 1.6% at 13,571 as compared to 0.76% decline in the Nifty 50 index at 6,966.
HDFC Bank (Rs 940) and ICICI Bank (Rs 183) from the Nifty Bank index, while Corporation Bank, Dena Bank, Jammu & Kashmir Bank, Karnataka Bank, Karur Vysya Bank and South India Bank have touched their respective 52-week lows during intra-day trade.
State Bank of India, Federal Bank, Bank of India, Yes Bank and Axis Bank were down more than 2% each, while Kotak Mahindra Bank, Punjab National Bank, IndusInd Bank, Bank of Baroda and Canara Bank down 1%-2% on the NSE.
Thus far in 2016, Nifty Bank index has underperforming the market by falling 19% as compared to 12% decline in the benchmark index.
Moody's Investors Service says that the credit profiles of Indian public sector banks will worsen, if the government does not revise upwards its capital infusion plan for the banks in the Indian upcoming budget to be presented on 29 February 2016.
Srikanth Vadlamani, Vice-President and Senior Credit Officer, Moody’s, said: “While the reported non-performing loans (NPLs) of the 11 public sector banks that we rate registered a significant 0.9-4.1% increase in the most recent quarter ended December 31, 2015, Moody’s view of the true underlying asset quality of these banks has remain unchanged.”
Moody's report points out that public sector banks are unlikely to gain access to the capital markets for equity capital in the near term given their low valuations. The banks will therefore have to turn to the government for accelerated capital injections over the next 18 months.
At 03:07 PM, Nifty Bank index was down 1.6% at 13,571 as compared to 0.76% decline in the Nifty 50 index at 6,966.
HDFC Bank (Rs 940) and ICICI Bank (Rs 183) from the Nifty Bank index, while Corporation Bank, Dena Bank, Jammu & Kashmir Bank, Karnataka Bank, Karur Vysya Bank and South India Bank have touched their respective 52-week lows during intra-day trade.
State Bank of India, Federal Bank, Bank of India, Yes Bank and Axis Bank were down more than 2% each, while Kotak Mahindra Bank, Punjab National Bank, IndusInd Bank, Bank of Baroda and Canara Bank down 1%-2% on the NSE.
Thus far in 2016, Nifty Bank index has underperforming the market by falling 19% as compared to 12% decline in the benchmark index.
Moody's Investors Service says that the credit profiles of Indian public sector banks will worsen, if the government does not revise upwards its capital infusion plan for the banks in the Indian upcoming budget to be presented on 29 February 2016.
Srikanth Vadlamani, Vice-President and Senior Credit Officer, Moody’s, said: “While the reported non-performing loans (NPLs) of the 11 public sector banks that we rate registered a significant 0.9-4.1% increase in the most recent quarter ended December 31, 2015, Moody’s view of the true underlying asset quality of these banks has remain unchanged.”
Moody's report points out that public sector banks are unlikely to gain access to the capital markets for equity capital in the near term given their low valuations. The banks will therefore have to turn to the government for accelerated capital injections over the next 18 months.
