Banking stocks tumble following fall in ADRs

MUMBAI: Players continued to batter banking stocks following a drop in their ADRs in US markets. Wednesday, ADRs of HDFC Bank and ICICI Bank plunged 10 per cent and 13.6 per cent respectively.

On BSE at 11:57 am, Bankex was down 6.11 per cent at 4316. The top losers among were HDFC Bank (-8.09%), ICICI Bank (-7.68%), Bank of India (6.37%), Yes Bank (-6.2%) and IDBI Bank (-6.04%).

Sentiments suffered another jolt on worsening global economic outlook after reports of more economies slipping into recession signaling worst situation for the global markets. Overnight weakness in the US and similar trend in other Asian bourses, especially in financial stocks, triggered a sell-off in banking shares in India as well. Also, credit rating agency Fitch has cautioned about the asset quality of ICICI Bank.

Despite inflation falling to single digit and RBI cutting key interest rates to ease the liquidity problems, banks are not cutting their prevailing lending rates and hence not finding many takers for loans.

India's WPI based Inflation eased to 8.90 per cent for the week ended November 8, against 8.98 for the previous week.