Banking shares dip post inflation nos

State Bank of India, ICICI Bank and HDFC Bank are down more than 2% each

Shares of frontline banking shares such as State Bank of India (SBI), ICICI Bank and HDFC Bank has dipped more than 2% after the May inflation numbers came higher as compared to previous month have seen little hope for Central Bank to cut key policy rates in its mid-quarterly policy review next week.

The National Stock Exchange banking share index Bank Nifty, the largest loser, is down almost 2% compared to less than 1% falls in the benchmark index Nifty at 1212 hours.

India’s headline inflation in May rose to 7.55% from 7.23% in April. The government also revised upwards the inflation rate for March from 6.89 to 7.69%, the highest in 2012.

The Reserve Bank of India, which uses the Wholesale Price Index (WPI)-based inflation number to decide monetary policy, is scheduled to hold its mid-quarterly policy review on Monday, June 18.

Among the individual stocks, Punjab National Bank, Canara Bank and Yes Bank are down 3% each, while ICICI Bank, SBI, Bank of India and IndusInd Bank are trading lower by 1-2% on the National Stock Exchange.