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Midsession: Markets seesaw, banks give up early gains

Midsession: Markets seesaw, banks give up early gains
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First Published: Wed, Mar 04 2009. 12 05 PM IST
Updated: Wed, Mar 04 2009. 12 05 PM IST
Mumbai: Indian shares were volatile in morning trade on Wednesday, seesawing between positive and negative as uncertainty surrounding the world financial sector fueled selling by foreign funds.
Leading banks State Bank of India and ICICI Bank rose in early deals but then turned down as the sector outlook remained bleak. ICICI fell more than 2.5% to be just above last October’s low of Rs282.15, a break of which would take it to its lowest in nearly 4-years.
ICICI’s shares fell 21.2% in February and are already down 12% in March, seeing its market capitalisation fall below that of smaller private-sector rival HDFC Bank. HDFC Bank was up 0.69% at Rs836.75.
“With so much uncertainty around, many overseas funds are trying to exit their holdings in the Indian markets. Every day we see an average outflow of $100 million from these funds,” said Deven Choksey, chief executive and managing director of brokerage KR Choksey.
Net interest margins in the quarter at Indian banks could be hurt due to high cost of deposits, Choksey said. They also will not have much opportunity for treasury gains as interest rate cuts are not on the horizon, he said.
Reliance Industries, India’s largest listed firm, was down 0.98% at Rs1187.30, extending losses into a fourth day. A few funds had sold a large chunk of the company’s stock on Tuesday, worrying domestic investors, traders said.
“Otherwise there is no reason for the stock to fall,” Choksey said.
The rupee’s fall to record lows this week, which was driven in part by losses in the stock market, was feeding back into further weaken sentiment on shares, traders said.
Asian markets, which were down in early trade, recovered later on news that China would increase its stimulus spending.
At 11:18am, the 30-share BSE Index was up 0.09% at 8435.10 points with 21 components gaining. The 50-share NSE Index was up 0.25% at 2,629.05 points.
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First Published: Wed, Mar 04 2009. 12 05 PM IST
More Topics: India | Stocks | Markets | BSE | NSE |