Bank shares, which led the record-setting rally in the domestic equities this year, could giveup part of their recent gains after the government's ordinance to deal with bad loans failed to live up to market expectations. Traders active in Bank Nifty futures, in which outstanding positions were near record levels on Friday, are likely to trim their bets this week that could weigh down the stocks in the period.
High hopes surrounding the new framework to tackle the problem of bad loans and better-than-expected March quarter earnings from the sector heavyweights -ICICI Bank and HDFC Bank BSE 0.16 % -further helped the rally in the space, which constitutes a third of the benchmark index Nifty's weightage. The optimism was seen even in the rollovers of derivative positions to the May futures of Bank Nifty from previous month, which was higher than the last three months' average.
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