PSU banking stocks came in for some heavy selling pressure, as Central Bank and Allahabad Bank both slipped into losses and PNB reported a sharp drop in net profits.
Allahabad Bank on the other hand posted a net loss of Rs 486 crore against a net profit of Rs 164 crore in the year-ago period. Punjab National Bank also fell 6 per cent, after the bank reported a sharp drop in net profits.
Dena Bank, State Bank of India and Syndicate Bank all dropped to new 52-week lows. The banking sector has been plagued with huge worries of non performing assets. The Reserve Bank of India's recent guidelines to make additional provisions for bad debts, has seen profits at banks plunge sharply.
Axis Bank, ICICI Bank, PNB, Allahabad Bank and Dena Bank have all seen non performing assets deteriorate. Analysts are now awaiting the results from some other biggies like State Bank of India and Bank of Baroda.
In all probability banking stock may see pains for one more quarter, after which we are likely to see some improvements in the asset quality. Hopes are that economic momentum may gather steam, after which we could seem some improvement in performance.