Date:20/09/2008 URL: http://www.thehindubusinessline.com/2008/09/20/stories/2008092051701300.htm

Back Bank stocks recover after mayhem

Our Bureau

Kolkata, Sept. 19 Bank stocks, which held well in comparison to other sector stocks during the mayhem since Monday, improved on Friday.

While Sensex with Friday’s recovery posted a miniscule weekly gain of 0.30 per cent, the BSE Bankex recorded a weekly gain of 1.15 per cent. In monthly terms, the Bankex has handsomely outperformed the benchmark index. In the past month, Bankex has gained 3.16 per cent against a Sensex loss of 3.45 per cent.

ICICI Bank, which had dropped the most, has recovered substantially in two consecutive sessions. It recovered over 9 per cent on Friday. Its week-on-week loss has been reduced to 3.79 per cent.

According to Mr Gul Teckchandani, a market strategist, Indian banks, which do not function in sub-optimal regulatory regime, fared better for obvious reasons. “However, the weakness witnessed in this week, was primarily on sentimental ground. Thus recovery and forward march is likely to be sharp,” he added.

Out of the 18 counters of the Bankex, only two — IOB and BOB — finished in the red on Friday. ICICI Bank was the top gainer followed by Kotak Mahindra (8.48 per cent).

According to Mr Ajay Jaiswal of Microsec, the smart stock picking has kept the banking counters in a better shape before the results season kick-starts within a few weeks.

Analysts felt that the bank stocks would ride the recovery wave till the levels those supported their fundamentals. As the inflation comes to a stable level and credit growth bounce back becomes visible, bank counters may see a modest rally in the medium term.