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AT a time when most broking firms, and markets in general, are bullish about the largest public sector bank, State Bank of India (SBI), a leading broking firm, has downgraded the stock from buy to neutral. The rationale behind the downgrade, according to a report released recently by the brokerage, is that the bank has not posted a good performance over the past two quarters i.e. at the peak of the banking cycle.

"The markets remain optimistic on SBI, given its low valuation and expect the bank to deliver on core earnings due to lower cost and retail thrust. However, SBI delivered poor performance at the cycle peak and we, therefore, doubt its ability in a downturn. SBI will likely continue to disappoint on its core earnings growth and this will likely affect its stock performance," the report adds.

SBI closed at Rs 313.90, up 0.93 per cent on the BSE with 16,50,457 shares being traded. On the NSE, the stock closed at Rs 314.25, up 1.18 per cent with 36,59,711 shares traded.

HCL Tech `buy talks' don't pay

THERE may be another acquisition in the offing from the Delhi-based software services company, HCL Technologies. According to market sources, the company is in "early stages of talks" with a large foreign insurance company with operations in India, to acquire a significant stake in its software business - a la its earlier joint venture with Deutsche Bank.

Despite this, the stock closed at Rs 165.05, down 6.3 per cent on the BSE. On the NSE, the stock closed at Rs 165, down 0.8 per cent. Trading volumes on the BSE and the NSE were 1,11,747 and 3,88,966 shares, respectively.

Fund shores up Andhra Bank

Andhra Bank on Monday witnessed significant trading activity. According to dealers, an offshore fund picked up around 10 lakh shares of the bank on Monday. Another positive factor is that the bank is repaying Rs 50 crore equity to the Government and is expected to repay another Rs 50 crore next year.

Overall, the market is expecting a good financial performance from Andhra Bank in the coming quarter.

On the back of this expectations, the share price touched a new 52-week high on the bourses on Monday , gaining 5.45 per cent on the BSE to close at Rs 30.95 with 47,55,755 shares being traded. On the NSE, the stock closed at Rs 31.05, up 1.70 per cent with 94,74,257 shares being traded.

Neha Kapoor

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