Bank scrips may dip on inflation blues

STOCK MARKET WATCH

"The bank stocks will behave in line with the broad market, which is seen down in the coming week as the overall sentiment is negative," said an analyst at a domestic broking house. India's headline inflation rate rose to 7.61 per cent for the week ended Aprl 26 from 7.57 per cent a week ago, the highest since November 8, 2004, when the rate was 7.68 per cent.

The rise in inflation rate is mainly on account of an increase in prices of food articles. Tea prices rose by 11 per cent, condiments and spices went up by 3 per cent and fruits rose by 2.3 per cent.

Inflation concerns still loom large. The crude oil futures touched a new high of $126 a barrel today on New York Mercantile Exchange, fuelled by heavy investment demand.

"The overall sentiment is negative and the market is in bearish mode. In the last couple of weeks, the inflation numbers remained high, which increases the risk of further monetary tightening by Reserve Bank of India," the analyst said.

The industrial growth figures for March, scheduled for release next week, are likely to be weak, which may further dampen the sentiment, analysts said."Industrial output is seen dipping in March as it may grow by only 3.8 per cent," said an analyst at a foreign brokerage.