Banking stocks were hammered in today’s trade. With inflation notching upto its 59th week high, the government is determined to curb it by taking various measures. According to experts, interest rate cut in near term is completely ruled out. Some feel that there may be a hike in CRR and Repo rate.

Abheek Baruah, HDFC Bank sees a significant probability of CRR, Repo Rate hike. It also feels that banks are looking at significant slowdown in credit demand. Rupee likely to remain range bound, any may touch 41/USD by May.

This has negatively affected banking stocks. This had a negative impact on bank stock and BSE Bankex and was down 5.91%.

Liquid banking stocks along with front-runners have taken a hit on chin. Stocks like Cent BOP were down 7.5%, followed by HDFC Bank, Axis Bank, Kotak Bank that was down 6%. Stocks like Canara Bank, Allahabad Bank were showing some resilience.

According to V Vaidyanathan of ICICI Bank, any cuts in interest rates are ruled out. They also see Inflation concerns are more on the supply side. CRR hike looks unlikely, as flows are moving out of the country. RBI may tinker with the repo rate purely from a signaling point of view.

List of Banking Stocks that were worst hit in today’s trade

Stocks	Previous Closing	Intraday Low	% Change
Cent BOP	46	42.45	7.72
HDFC Bank	1401.05	1293.05	7.71
Axis Bank	804.9	744	7.57
Kotak Bank	671.15	613	8.66
ICICI Bank	835.2	774.1	7.32
YES Bank	182.65	168.5	7.75
BOB	301.3	285.35	5.29
SBI	1679.85	1590	5.35
PNB	527.8	500	5.27
UNION Bank	146.05	141	3.46
BOI	272.25	256.7	5.71
Karnataka Bank	203.35	198	2.63
Canara Bank	227.15	222	2.27
Allahabad Bank	79.95	76.8	3.94

- By Aniket Vakharia