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ICICI Bank Ltd.: A Bellwether for India’s Faltering Economy?

ICICI Bank Ltd.With the India markets seeing all kinds of indicators that the economy is in recession a bellwether stock has been ICICI Bank Ltd. (NYSE:IBN), which seems to reflect the overall state of the conomy with its results.  In Tuesday’s trading, ICICI Bank Ltd. stock was down 0.3 percent to $32.38 a share, reflecting recent falls from $35 a share just on Thursday but stunting a recovery from a valley of about $28 a share at the beginning of June. The stock was up 25 percent in about six weeks, then down 10 percent in about six days.

The ICICI Bank Ltd. discussions have been all over the place in recent years – almost like the market in India itself. This page has a variety of opinions on the stock and the bank from various times in the last several years, but information has been hard to gather of late. However, with ICICI Bank Ltd. touting as the country’s largest private-sector bank, it is considered to be one of the top indicators of the health of the India economy. And as news spreads of India’s struggles economically, it seems that the bearish outlook generally tends to reflect specifically on stocks from that country, like ICICI Bank Ltd.

The latest news from the bank’s main web site was that its non-resident deposit rate (to encourage foreign investment) was hiked to 4.11 percent over five years. But that news was in May, before the most recent India economy correction in the market.

Whether fair of not, ICICI Bank stock seems to mirror the India market, and several hedge funds have various bets on the economy as a whole and IBN stock specifically. Israel Englander’s Millennium Management, for example, upped its stake in the bank’s stock by more than 00 percent in the first quarter of 2012, taking a $7.7 million position by the end of March.  On the bearish side of the coin, however, is D E Shaw, which sold more than half of its position in the first quarter of the year, finishing March with just shy of $1.5 million in play.

ICICI Bank Ltd. has a U.S. market cap of $18.7 billion and a daily volume of 850,000 shares. ICICI Bank isn’t the only way to play Indian stock market. We also like PowerShares India Portfolio ETF (NYSEARCA:PIN).