Banks in bear grip but impact US credit turmoil seen very less

The BSE Banking Index on Wednesday fell by almost 6 per cent. ICICI Bank was the worst-hit. The stock fell close to 9 per cent to Rs 544.05 (LTP). HDFC Bank, Axis Bank, and Allahabad Bank fell by 3-4 per cent.

There is an overall weakness in the banking counters. One must take into account the fact that in a falling market, banking and auto continue to get a negative response from the market. And as the market goes up, these counters would see a revival

With the credit growth going down, losses in treasury bills, and prohibitive interest rates, the situation in the sector has exacerbated. Banks, which would be belligerent on issuing loans to sectors like real estate, due to delinquencies, have become more conscious towards it. Sector experts are of the opinion that most banks would register negative results in the coming quarter.