BANKING STOCKS WORST HIT

Banking stocks were badly battered yet again , with the BSE Bankex shedding 171 points or 2.43 per cent from its previous day’s close. Over the last week, the index has shed 7.23 per cent and over the last month, 19.38 per cent.
Three banking stocks in theSensex basket were amongst the worst performing stocks of the day. HDFC Bank dropped 4.46 per cent, ICICI shed 2.47 per cent and SBI fell 1.06 per cent. The other banking stocks that declined today were Andhra Bank, Bank of Baroda, Canara Bank, Federal Bank and Indian Overseas Bank.
The BSE Bankex has been underperforming the benchmark index, the Sensex, for more than a month now. So it is no surprise that most of the banking stocks today touched their 52-week lows. Among the stocks that recorded their new lows were ICICI Bank, SBI, Oriental Bank, Karnataka Bank, Axis Bank, Canara Bank, Allahabad Bank, Central Bank, IDBI Bank and Syndicate Bank.
Investors are uncertain as to what steps the RBI would take to rein in inflation, which is a major reason for investors wanting to exit the banking stocks. The macro-economic numbers do not look very good now. The main concerns with regard to the banking sector now are the rising rate of inflation and with PSU banks it is the moral hazard created by the recently announced farm loan waiver. With inflation on the rise, further tightening of interest rates cannot be ruled out in the near future