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Banking stocks take a breather after Thursday's euphoria

Banking stocks take a breather after Thursday's euphoria
YES Bank: Quotes, News
BSE 87.75BSE Quote4.5 (5.13%)
NSE 88.10NSE Quote4.85 (5.51%)
ICICI Bank: Quotes, News
BSE 411.00BSE Quote0.9 (0.22%)
NSE 411.45NSE Quote1.15 (0.28%)
Banking stocks paused in trade today after the spectacular rally witnessed on Thursday, as markets turned cautious ahead of the US non farm payrolls data.

ICICI Bank, however, bucked the trend rallying a staggering 3.45 per cent in trade., while most of the other banking stocks fell in trade.

HDFC Bank, was down 1.65 per cent, while Kotak Bank was down 1 per cent, while Yes Bank also shed 1 per cent in trade. PSU banking stocks joined private sector banking stocks lower with State Bank of India down 2 per cent and Canara Bank down 3.71 per cent.

Other PSU banking stocks that fell were Bank of Baroda, Bank of India, Syndicate Bank and Oriental Bank of Commerce.

In a press conference scheduled late on Wednesday new RBI Governor permitted banks to borrow more in dollars. Banks are now allowed to raise foreign debt to the extent of 100 percent of their tier I capital, as against the 50 per cent currently.

This sent banking stocks soaring on Thursday with shares like Yes Bank rallying as much as 20% in a single trading session.

Analysts say that the rally is uncalled for as nothing has changed for the banking sector with interest rates elevated and credit offtake low.

Story first published: Friday, September 6, 2013, 11:01 [IST]
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