Bank Nifty hits 52-week low as rupee touches new low

Union Bank of India, Corporation Bank, Oriental Bank, Karnataka Bank, Uco Bank, Canara Bank and YES Bank are down 5-7% on NSE.

Banking shares are under hammer and trading lower by up to 7% after the rupee touched a record low 61.66 against the dollar in noon deals today.

Union Bank of India, Corporation Bank, Oriental Bank of Commerce, Karnataka Bank, Uco Bank, Canara Bank and YES Bank are down in the range of 5-7% on the National Stock Exchange (NSE).

The NSE banking index Bank Nifty has tanked 3.3% as compared to 1.5% fall in benchmark CNX Nifty at 1226 hours. Bank Nifty hit 52-week low of 9,756 in intra-day trades.

The government has taken many steps to contain the free fall of rupee in the past few days but has met with utter disappointment as the rupee has only continued to slide.

The Reserve Bank of India (RBI)  in its attempt first capped banks’ daily borrowing from its repo window at Rs.75,000 crore, or 1% of banks’ deposits alongside hiking in the bank rate and the rate of the marginal standing facility to 10.25%.

As the measures seemed insufficient for the fall continued RBI tried harder to contain household savings by capping individual bank’s borrowing limit at 0.5% of deposits. It also made mandatory for banks to maintain 99% of the cash reserve ratio (CRR), against the earlier 70%.

State Bank of India, ICICI Bank, Punjab National Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank are among the notable banking shares down between 1-4% on NSE.