Shares of 14 banks fell by 0.83% to 5.74% at 9:48 IST on BSE as yields on government bonds surged.
Yes Bank (down 5.74%), IndusInd Bank (down 4.50%), Bank of India (down 3.82%), Axis Bank (down 3.32%), Bank of Baroda (down 3.32%), Punjab National Bank (down 3.09%), Federal Bank (down 2.84%), IDBI Bank (down 1.87%), State Bank of India (down 1.69%), Union Bank of India (down 1.42%), ICICI Bank (down 1.33%), HDFC Bank (down 1.29%), Canara Bank (down 1.26%) and Kotak Mahindra Bank (down 0.83%), edged lower.
The S&P BSE Bankex was down 1.62% at 10,263.63. It underperformed the S&P BSE Sensex, which was down 1.32% at 18,065.23.
The S&P BSE Bankex had underperformed the market over the past one month till 19 August 2013, sliding 16.82% compared with the Sensex's 9.14% decline. The index had also underperformed the market in past one quarter, falling 31.43% as against Sensex's 9.75% fall.
India's benchmark 10-year government bond yield surged today, 20 August 2013, as the rupee extended recent losses.
At 9:41 IST, the benchmark 10-year bond yield surged to 9.4498%. The partially convertible rupee was trading at 63.93 per dollar, after hitting a record low of 64.11 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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