Overheated Bank Stocks Tumble

Overheated bank stocks, too, were among the day's casualties. The Bank of India (BoI), HDFC bank and Federal Bank stocks were the major losers.

At the BSE, BoI closed at Rs 68.50, down Rs 4.75 over the previous close of Rs 73.25, while Federal Bank lost Rs 1.75 to close at Rs 96.25 despite opening the day on a strong note at Rs 102.

HDFC Bank lost Rs 2.50 to close at Rs 59.50 after having touched an intra- day high of Rs 63.25. However, the Bank of Rajasthan scrip gained Rs 8.25 over the previous close to hit the upper end of the circuit filter at Rs 91. Marketmen feel all the bank scrips are overheated due to heavy speculation.

"With institutions setting their eyes on bank scrips as a safe bet, speculators made an entry into these scrips with the result that most of the bank scrips are quoting a hefty premium to their actual price," says a source at a domestic institution.

``Secondly, the euphoria over the banking stocks after the market friendly RBI credit policy is slowly beginning to fade out. Institutions are now looking forward to buy bank stocks at more reasonable prices," he added.