ICICI leads dip in bank stocks ahead of policy review

The bank index of the Bombay Stock Exchange fell by 0.08 per cent today ahead of the Reserve Bank's quarterly review of the monetary policy.

The BSE-bankex fell 0.08 per cent, or 9.08 points, to 11,390.51 in early trade.

However, the country's largest lender, State Bank of India, jumped 0.57 per cent to touch an intra-day high of Rs 2,422.80. Later, the scrip was trading at Rs 2,419.60, up 0.45 per cent, at 0927 hrs.

The Reserve Bank is expected to hike the short-term lending and borrowing rates (repo and reverse repo) by at least 0.25 per cent each to tame inflation.
    
"On a long-term basis, the banking stocks looks good. But in terms of short-term investment it may be riskier. Whatever the announcement by the RBI, it will not impact the stock negatively. Market has already digested the earlier hike by the apex bank," BNP Paribas Financial Services Assistant Vice-President Gaurang Shah said.
    
ICICI Bank fell by 1.62 per cent to touch an intra-day low of Rs 901. The stock was being quoted at Rs 912.90, down 0.32 per cent.
    
Other banking stocks which were in the red include Punjab National Bank (down 0.21 per cent), Canara Bank (down 0.29 per cent), Bank of Baroda (down 0.55 per cent), Bank of Maharashtra (down 0.24 per cent), Bank of India (down 0.14 per cent), Central Bank (down 0.98 per cent) and UCO Bank (down 0.93 per cent).
    
Meanwhile, some banking stocks were trading higher, like HDFC Bank (up 0.48 per cent), IDBI Bank (up 0.13 per cent), Indian Bank (up 1.01 per cent).
    
The broader market Sensex was 0.08 per cent up at 18,034.81 at 0944 hrs.
    
Earlier this month, the RBI had raised the repo and reverse repo rates by 25 basis points to tame inflation.