Bank shares were the worst hit as the RBI move to raise savings deposit rate will make funds costlier for lenders, coming at a time when already there are fears of credit growth slackening due to high interest rates.
Apart from banks, auto and realty shares also fell sharply because of their sensitivity to interest rates. The BSE sectoral indices for banks, auto and realty, tumbled over 3% each.
Market experts are worried that higher borrowing costs—resulting from an increase in interest rates—will hurt companies’ operating margins. This in turn, could lead to a downgrade in earnings estimates, and drag share prices lower.
“It is a good time to enter banking shares,”. SBI, ICICI Bank, HDFC Bank, PNB, HDFC and Axis Bank were down 2-5%.
Apart from banks, auto and realty shares also fell sharply because of their sensitivity to interest rates. The BSE sectoral indices for banks, auto and realty, tumbled over 3% each.
Market experts are worried that higher borrowing costs—resulting from an increase in interest rates—will hurt companies’ operating margins. This in turn, could lead to a downgrade in earnings estimates, and drag share prices lower.
“It is a good time to enter banking shares,”. SBI, ICICI Bank, HDFC Bank, PNB, HDFC and Axis Bank were down 2-5%.
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