Bank Nifty falls 3%; ICICI Bank slips 5%

BOI,Federal Bank, Kotak Mahindra Bank, BOB, Yes Bank, Canara Bank and Axis Bank were down more than 3% each.

Banking shares were under pressure in late-noon deals, with the Bank Nifty dipping over 600 points on the National Stock Exchange (NSE), as overseas investor selling and increase in crude oil prices hit investor sentiment adversely.

At 1501 hours, Bank Nifty was down 3.4% or 626 points at 17,845 against 2.5% fall in the CNX Nifty The banking index touched a low of 17,810 in intra-day trade.

ICICI Bank, Bank of India (BOI), Federal Bank, Kotak Mahindra Bank, Bank of Baroda (BOB), Yes Bank, Canara Bank, Axis Bank, IndusInd Bank and Punjab National Bank were down more than 3% each, while State Bank of India and HDFC Bank were down over 1% each on the NSE.

Foreign institutional investors (FIIs), the main driver of the equity markets, have sold Rs 9,308 crore worth of equities in the last nine trading sessions.

The FIIs were net sellers in Indian shares to the tune of Rs 3,018 crore ($474.7 million) on May 4, the biggest outflow since July 2, according to exchange data released yesterday.

Meanwhile, oil prices hit their highest for the year on Tuesday. The recent rebound in global crude oil prices will raise concerns pertaining to India's fiscal deficit, current account deficit and fuel price inflation. India imports about 80% of its crude oil requirements.

Among the individual stocks, Bank of India was dipped 6%, while ICICI Bank and Federal Bank were down 5% each on the NSE.