Anil Manghnani of Modern Shares & Stock Brokers is of the view that one can ignore private sector bank stocks.
Manghnani told CNBC-TV18, "Kotak Mahindra Bank is getting scarier by day. I think this whole subprime is probably now spooking the market beyond anybody's expectation. I remember six-eight months when the real subprime hit the US at that time there were lot of rumours in the market maybe ICICI Bank has exposure, and that time it flatly denied that there is any problem or they have any exposure to subprime whether directly or indirectly and it is unfortunate that it has come at a time when the market is anyway in a bad phase and now even good stocks, which may not have subprime worries or not have any stake out there are getting butchered."
He further added, "The high of Kotak Mahindra is Rs 1,400 so sub 600 you can imagine amount, it is not midcap, it is probably one of the frontline banking stocks. So when those stocks start falling 60-70% there is some sort of problem out there and the way these stocks are falling, there is no one to say whether they cannot go back to last year's low when the market was 12,000 levels. Kotak started off from Rs 400 or Rs 300 to move upto Rs 1,400, there is nothing to say that it cannot come back to those levels. So it is pretty scary picture out there and probably banks at least the private sector for the time being till the subprime issue gets sorted out, even domestically, maybe an avoidable stock for the time being."
Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.
