Shares of 14 banks fell by 1.67% to 7.93% at 14:42 IST on BSE as yields on government bonds surged.
Yes Bank (down 7.93%), Bank of Baroda (down 7.53%), Canara Bank (down 7.32%), Axis Bank (down 6.20%), Bank of India (down 6.14%), ICICI Bank (down 5.35%), Punjab National Bank (down 5.03%), Federal Bank (down 4.84%), IndusInd Bank (down 4.10%), Union Bank of India (down 3.87%), IDBI Bank (down 2.79%), State Bank of India (down 2.62%), Kotak Mahindra Bank (down 2.41%) and HDFC Bank (down 1.67%), edged lower.
The S&P BSE Bankex was down 3.70% at 10,401.03. It underperformed the S&P BSE Sensex, which was down 2.13% at 18,201.68.
The Bankex had underperformed the market over the past one month till 16 August 2013, sliding 15.76% compared with the Sensex's 6.31% decline. The index had also underperformed the market in past one quarter, falling 28.61% as against Sensex's 8.15% fall.
India's benchmark 10-year government bond yield surged today, 19 August 2013, as the rupee extended recent losses.
The benchmark 10-year bond yield was trading at 9.08%. The partially convertible rupee was trading at 62.69 per dollar, after hitting a record low of 62.82 per dollar earlier today.
Lower bond prices will result in diminution in value of bond holdings by banks. Bond yields and bond prices are inversely related.
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