Bank Shares Decline Following Profit Booking and Rise in Bond Yields

Bank Sector Index Falls 2% Amid Profit Booking and Rising Bond Yields

On Friday, the bank sector index experienced a decline of approximately 2% following a two-day gaining streak. This downturn was driven by profit booking and a rise in bond yields.

Bank Nifty Performance The Bank Nifty, which had gained 4.37% in the previous two sessions, declined up to 2% during the day due to selling pressure. All 14 constituents of the index were trading in the red, with Canara Bank being the top laggard, falling up to 4%. Bank of Baroda and Punjab National Bank declined 3.78% and 3.29%, respectively.

HDFC Bank Reverses Gains HDFC Bank also reversed its two-day gains and fell more than 2%. This decline came amid reports of differences between the former chairman Atanu Chakraborty and chief executive Sashidhar Jagdishan. Chakraborty had opposed extending Jagdishan's tenure, while a majority of the board supported it.

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State-owned Lenders Decline State-owned lenders led the decline, with concerns that rising crude prices could push up borrowing costs and bond yields, thereby impacting treasury income. The Nifty PSU Bank index fell up to 3%, with all 12 constituents trading lower. Bank of Baroda was among the top losers, down more than 3%.

Nifty Private Bank Index Declines The Nifty Private Bank index declined about 1.5%, with all 10 constituents in the red. IndusInd Bank and HDFC Bank were among the key laggards, each falling more than 2%.