Banking shares crack; Bank Nifty tanks 5%

Banking shares continue under pressure, with the National Stock Exchange (NSE) Bank Nifty cracking over 5% or nearly 1,000 points in intra-day trade as the global markets crashed owing to concerns over economic slowdown in China, the world’s second largest economy.

Bank of India, Punjab National Bank, Canara Bank, Yes Bank, Bank of Baroda and Federal Bank are down more than 7% each.

HDFC Bank, Kotak Mahindra Bank, State Bank of India, Axis Bank, Indusind Bank and ICICI Bank are down 4%-6% each on the NSE.

At 10:55 AM, Bank Nifty was down 941 points or 5.2% at 17,116 against a 4.3% decline in the CNX Nifty. The banking index has fallen 969 points to 17,088 in intra-day trade today.

In the past one week, the Bank Nifty has plunged 9% or 1,698 points from 18,822 on August 17, compared to 6% decline in the benchmark index.

Global markets have crashed following weeks of reports regarding China’s low economic growth as its consumption story falters. This is in addition to other irritants such as Europe’s woes and a general slowdown in economies across the globe. The US rebound story too is yet incomplete.

According to Jayant Manglik, President, Retail Distribution, Religare Securities, in such markets, the Indian economy still remains a bright spot. Of course, low commodity prices are good for India but a global slowdown is not. Anyway, this is no Black Monday, it is a buying opportunity and sharp investors are looking for good openings in specific stocks. Operationally, there are no issues due to stringent margin requirements.

Our markets may well be first off the block in recovering from this fall, it is time to look for bargains in high quality stocks, he added.

Meanwhile, Oriental Bank of Commerce (down 9% at Rs 145), South Indian Bank (8% at Rs 20), ICICI Bank (6% at Rs 277), Uco Bank (6% at Rs 48), Corporation Bank (4% at Rs 48), Dena Bank (4% at Rs 42), Vijaya Bank (4% at Rs 36), Bank of Maharashtra (3% at Rs 34) and State Bank of Bikaner & Jaipur (3% at Rs 506) are trading at their 52-week low on the NSE.

National Stock Exchange of India Ltd (NSE)