India Bank Rollovers Drop as Asset Woes Return on Axis Results

  • Lender worst performer on Bloomberg Asia Pacific Banks index
  • Banks to trail market in November on bad loans concern: IIFL

Indian traders extended fewer monthly futures contracts on the CNX Bank Nifty index than the average rate of the past six months as Axis Bank Ltd.’s shares fell the most among Asian lenders amid concern its soured debt will rise further.

The rollover rate of October futures was 45 percent as of 3:03 p.m. in Mumbai, less than the 48 percent average of the past three derivatives series, data compiled by Bloomberg show. Axis Bank plunged 7.8 percent, headed for its steepest retreat in more than two months, after reporting in a Tuesday filing that it had sold 18.5 billion rupees ($284 million) of stressed assets to asset reconstruction companies.

“The Bank Nifty could be under pressure as the focus shifts back to bad loans after Axis Bank’s results,” Sanjiv Bhasin, executive vice president at India Infoline Ltd., said by phone from New Delhi. “Private lenders will follow state-run banks in under-performing the market next month.” He is advising clients to buy put options on the Bank Nifty.

The 12-stock Bank Nifty gauge tumbled 2.7 percent to 17,325.17, poised for the steepest loss in a month. Lenders, which have a combined 25 percent weighting on the CNX Nifty Index, were the biggest contributors to the third day of declines in the 50-stock gauge.

CNX Bank Nifty futures for October delivery fell 2.7 percent to 17,355, while the November contract declined by as much to 17,444. The India VIX Index, the benchmark gauge of the cost of equity options, jumped 3.9 percent to 17.2.

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