BSE's banking share index ‘Bankex’ had surged 153.28 points, or 1.92%, to 8,143.76 in noon trades on anticipations that interest rates may diminish because of lower inflation.
The existing level is a record high for the Bankex. It also hit a low of 8,019.66 during the day. On 19 July 2006, the Bankex had touched a 52-week low of 4,032.39.
State Bank of India (SBI) boosted 3.21% to Rs 1580, ICICI Bank 1.64% to Rs 966.25, HDFC Bank 0.34% to Rs 1150, Bank of India 0.26% to Rs 228.20, Punjab National Bank (PNB) 2.55% to Rs 541.80.
On the other hand, ICICI Bank, State Bank of India and HDFC bank showed weightages of 40.36%, 17.12% and 13.83%, correspondingly, in the Bankex.
Today, the banking shares ascended on regenerated buying on prospect that interest rates may soften because of lower inflation. Lower interest rate would produce superior demand of funds from consumers. The data published late last week depicted that the inflation slumped to a 14-month low of 4.03% in the week ended 16 June 2007.
On 18 June 2007, the Bankex had climbed up 4.76% from 7479.15 to 7835.34 on 22 June 2007, following strong reaction to the follow-on public offer (FPO) of ICICI Bank that was open for subscription for four days between 19 - 22 June 2007.
Previously, the Bankex had plunged from 7,512.09 on 7 June 2007 to 7,368.69 on 13 June 2007. From that low, it had gained 8.43% to 7990.48 on 2 July 2007.