Banking stocks rally as bond yields fall

Posted By:
Subscribe to GoodReturns

 Banking stocks rally as bond yields fall
YES Bank: Quotes, News
BSE 359.55BSE Quote1.2 (0.33%)
NSE 359.60NSE Quote1.05 (0.29%)
ICICI Bank: Quotes, News
BSE 279.50BSE Quote2.4 (0.86%)
NSE 279.50NSE Quote2.4 (0.86%)
Banking stocks gained in trade today as government bond yields fell and bond prices rose. Banks in India have to keep a per centage of their deposits in liquid assets, mostly government bonds. When bonds yields rise, bond rates fall and banks take a hit.

Shares in Yes Bank rallied 4 per cent, while ICICI Bank gained 1 per cent and HDFC Bank also rallied 1 per cent. Most of the PSU banks led by IDBI Bank and Oriental Bank were trading higher.

The yield on the benchmark 10-year government bond hit 9.48 per cent earlier this week pushing down shares of Yes Bank and State Bank to 52-week lows. The yields have now cooled to 8.30 per cent, which has led to a rally in banking stocks.

Read more about: yes bank
Story first published: Friday, August 23, 2013, 11:23 [IST]
Please Wait while comments are loading...
Company Search
Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'