Bank shares turn positive after September trade data

The NSE bank index turned positive, up 0.5 percent after earlier falling as much as 1.9 per cent earlier in the day after September trade deficit came in better than expected at $6.7 billion, dealers said.

The narrower trade deficit, as signalled by the fall in imports, bodes well for the current account balance, thus supporting the currency and reducing some of the inflationary pressures, analysts said.

"A lower current account deficit will also ease the RBI's constraints on rupee-related concerns, which would help in reducing the exchange-rate led inflation pressures and in turn help in limiting expectations over repo rate hikes," said Siddhartha Sanyal, an economist for Barclays in Mumbai.

Punjab National BankBSE 1.88 % was up 1 per cent after earlier falling as much as 1.9 per cent while State Bank of IndiaBSE 0.04 % pared losses, down 0.5 per cent compared to a 2.1 per cent fall earlier in the day.

Courtesy: The Economic Times