Pvt bank stocks gain currency

The Rs 1,300-crore block deal in ICICI Bank last week has benefited private sector banking sector stocks. Hopes of consolidation in the bank...

The Rs 1,300-crore block deal in ICICI Bank last week has benefited private sector banking sector stocks. Hopes of consolidation in the banking industry coupled with low valuations led to increased activity in many of these counters which were badly battered during the past couple of months, Delhi-based NSE brokers say.

Top gainer, Karnataka Bank has seen a sharp spurt of 11 per cent in prices since September 25. Other private sector banking stocks like J&K Bank, Karur Vysya Bank, IndusInd Bank and UTI Bank have jumped up to 4 per cent during the past four trading days, that too in a listless market. State Bank of India was also among major Sensex gainers on Tuesday closing at Rs 234.5. While Tuesday saw some selling pressure, these stocks have gained 1-4 per cent in two trading days as Sensex plunged below the psychological barrier of 3,000 points on Monday and closed at 2,959.66 points on Tuesday .

ICICI Bank had off-loaded its 16.5 per cent stake on September 26 to foreign funds at Rs 130 per share, grossing a handsome Rs 1,318 crore. Although some analysts termed the deal as a desperate move, the stock price has surged 8.3 per cent since then to close at Rs 144.85 on Tuesday as against Rs 133.75 on September 26. The gain posted by Karnataka Bank, the top gainer during the period, was also aided by the revision of its rights issue to one share for every two shares held by stake holders in place of one share for each share earlier. Broking sources say the bank would now have to issue lesser shares, thus a lesser increase in the floating stock in the market. The stock has surged 10.89 per cent since last Wednesday to close at Rs 141 on Tuesday.

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J&K Bank was the other prominent gainer during the period surging 4.18 per cent since September 25 to close at Rs 90.9 as against Rs 87.25 last Wednesday. Smaller private banks like Karur Vysya Bank and IndusInd Bank have gained 3.2 per cent and 3.1 per cent since their close on September 25. The two counters closed at Rs 490 and Rs 14.95, gaining over one per cent on Tuesday alone, as against their close of Rs 474.8 and Rs 14.5 respectively on Wednesday.

The A-group private banking counters like UTI Bank and HDFC Bank saw some selling during the past two days and closed at Rs 36.3 and Rs 211.65 on Tuesday with a gain of 2.69 per cent and 1 per cent, respectively.