Banking shares dip on profit booking

Andhra Bank, Oriental Bank, Axis Bank, Central Bank, YES Bank,Allahabad Bank, BOI and DCB Bank surged 20-32% in past one month.

Shares of the frontline banks are trading lower on profit booking after rallying nearly 14% in past one month.ICICI Bank, State Bank of India (SBI), Bank of Baroda, Axis Bank, Bank of India, Punjab National Bank and Canara Bank are down between 1-2% on the National Stock Exchange (NSE).

Bank Nifty, the NSE banking share index, has dipped 110 points or 0.62% at Rs 17,477 as compared to 0.02% decline in CNX Nifty at 1400 hours. The banking index hit a low of 17,435, slipped 216 points from its record high of 17,651 touched in early morning trade on NSE.

In past one month, Bank Nifty had rallied 13.8% against 6.4% rise in the benchmark index till yesterday after the Wholesale Price Index (WPI)-based inflation declined to its lowest level in five years in September. The October WPI inflation data is due on Friday, 14 November.

Meanwhile, the Consumer-Price Index (CPI) based inflation rose to 5.52% in October compared to the same period last year, its lowest rate since the government started releasing the data in February 2012.

CRISIL Research believes that the Reserve Bank of India would wait till there are clear indications that the fall in inflation will be sustained, before beginning to lower repo rate.

Andhra Bank, Oriental Bank of Commerce, Axis Bank, Central Bank of India, Karnataka Bank, Yes Bank, Allahabad Bank, Bank of India and DCB Bank had surged 20-32% in past one month.