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A day after the Union Finance Minister nudged the PSU banks to cut the base rate, PSU bank stocks were under some pressure with three of them falling to a new 52-week low on the NSE this morning.
The NSE Bank Nifty was down by about 48 points after banking behemoth SBI, which was initially trading in the green, caved in later. Even among the private sector frontliners, ICICI Bank and Axis Bank shares were down, while HDFC Bank was trading in positive territory.
PNB sank to a new 52-week low of Rs 607 before recovering marginally to Rs 608.50.
Two other PSU banks BoI and BoB also slipped into new lows. BoI touched a low of Rs 215.70 before edging up to Rs 216.30 and BoB dived to a new now of Rs 535 before gaining marginally to trade at Rs 537.40. SBI, which was initially in the green that helped to keep the index from crashing, lost Rs 21.25 to trade at Rs 1,877.50.
Among the private banks, ICICI Bank lost Rs 10.50 to trade at Rs 1,053.50 and Axis Bank shed Rs 2.85 at Rs 1,275.
The only bank stocks in the green were IndusInd, HDFC Bank and Kotak Mahindra Bank but these were ahead only marginally.
It was interesting to note that the behaviour of PSU bank stocks to some extent reflected their expected response to the advice of the Finance Minister to explore the possibility of cut in base rates, which would lead to cut in lending rates.
While BoI had announced a cut of 0.25 per cent in base rate yesterday itself, several others like BoB, PNB and Canara Bank were mentioned among the banks that may possibly follow suit.
All these bank stocks lost today.
But interestingly, reservation expressed by the the SBI Chairman over the prospoal since SBI rates were already lower than its competitors, helped the stock to hold itself initially before it fell in line with other PSU majors. But what was surprising was that whenever RBI Governor held policy review meeting, media speculation on rate cut drove the stocks up. But when Chidambaram urged the banks to cut the rates, the bank shares actually headed South!
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