Equity Alert: Bank shares down 3-4%; near-term outlook bleak

[K.Karthik Raja]

Equity Alert: Bank shares down 3-4%; near-term outlook bleak

Equity Alert: Bank shares down 3-4%; near-term outlook bleak
Bank shares fell 3-4% today on concern that interest rates may
rise after Reserve Bank of India hiked repo rate by 25 basis points to
8% late Wednesday.
Analysts said the move will hurt banks' margins and profitability
in the next two quarters.
Public sector banks are expected to face more pressure than their
private sector peers, as state-run banks cannot pass on the rate hike
to the customers, they said.
HDFC Bank fell over 4% to 1,144 rupees, while State Bank of India
declined 3% to 1,272 rupees. ICICI Bank was down over 3% at 714
rupees.
CNX Bank Nifty slipped 3.5%.
"The sector looks slightly oversold. There is a possibility of a
bounce
back, though it may not be significant. There is still some selling
pressure seen in the counters especially from foreign funds

SBI may find support at around 1,215 rupees, and HDFC Bank at
1,120 rupees
for the day, he said.