But soon selling pressure began. The Nifty eventually ended the day a huge 143 points lower. Through the day the Bank Nifty dragged the indices lower.
First, Bank of Baroda reported financial results that were a complete disaster and this was followed by ICICI Bank, which reported an increase in gross non performing assets. In the previous few days Oriental Bank of Commerce and Union Bank of India also reported a dismal set of numbers. The Bank Nifty fell a huge 400 points on the back of a fall in Bank of Baroda, Punjab National Bank, State Bank of India and ICICI Bank.
In the last few months there has been a renewed call to buy into banking shares on the hopes of an economic recovery. But, neither is economic recovery gathering momentum and neither is there a recovery of non performing assets for the banking sector. In fact, it is only beginning to get worse for the sector.
Some analysts say that a sharp turnaround in economic recovery in the Indian economy under the Narenadra Modi government maybe exaggerated. Not only banking shares, they do see the markets overall falling should recovery not gather steam.
It would be interesting to see if we have hyped up things in the last few months.