Banking Stocks Drop by Up to 8 Percent on Concerns of Bad Debts
However, ICICI Bank's grew 2.35 percent higher to settle at 928.20 on the BSE as the private sector lender posted a decline in net non-performing asset (NPA) in the June quarter.
On the contrary to ICICI, Punjab National Bank declined by 5.34 percent to settle at 715.85 on the BSE, while shares of Bank of India tumbled by 5.34 per cent to close at 291.35.
In addition, the scrip of Union Bank slumped as much as 7.86 percent to close at 164.05. Besides, Central Bank of India, too, witnessed a surge in bad debts sending its shares down by 6.07 percent to close at 68.85.
The scrip of Dena Bank went down 4.12 percent to close at 87.30.
Most of the PSU banks, which posted their respective quarterly earnings have witnessed a rise in NPA in the three months ended June 30, 2012. In contrast, ICICI Bank was able to trim its NPA.
The PSU banks' quarterly earnings marred State Bank of India's performance, which fell 3.77 percent to close at Rs 1,941.20 on the BSE, according to market experts.
However, SBI is yet to announce its second quarter results.
A sharp fall in SBI's share price, placed it below than HDFC Bank in terms of market capitalisation.
HDFC Bank's fell by 3.13 percent to settle at 584.25 as a result, private sector bank's market capitalisation rose to 1,37,554 crore as against SBI's 1,30,263 crore, according to the BSE data.
The sharp fall in the PSU bank's share prices were in contrast with overall strength in the broader market. The BSE's benchmark Sensex rose 199.37 points, or 1.20 per cent, to close at 16,839.19 points.