Bank shares erase early gains as RBI keeps repo rate unchanged

PNB, Federal Bank, BOB and YES Bank were down 2% to 4% from intra-day highs

Bank shares have fallen up to 4% from their respective intra-day highs after the Reserve Bank of India (RBI) kept repo rate unchanged at 6.25% against market expectation of 25 basis points cut.

Punjab National Bank (PNB), Federal Bank, Bank of Baroda (BOB), Dhanlaxmi Bank, Indian Bank, Oriental Bank of Commerce, Bank of India, YES Bank, ICICI Bank, Andhra Bank, State Bank of India (SBI) and HDFC Bank were down between 2% and 4% from their intra-day highs on National Stock Exchange (NSE).

At 2:53 pm; Nifty PSU Bank index and Nifty Bank index were down 1% each, as compared to 0.48% decline in the Nifty50 index. Nifty PSU Bank index was down 2.6%, while Nifty Bank index down 1.9% from their respective intra-day highs.

Meanwhile, the RBI withdraws the incremental cash reserve ratio (CRR).

“With the enhancement in the ceiling for issue of securities under the Market Stabilisation Scheme (MSS) to Rs 6,000 billion, it has been decided to withdraw the incremental CRR effective the fortnight beginning December 10, 2016,” RBI said in a press release.

The liquidity released by the discontinuation of the incremental CRR would be absorbed by a mix of MSS issuances and liquidity adjustment facility (LAF) operations, it added. CLICK HERE TO READ FULL POLICY

BANK	DAY'S HIGH(RS)	DAY'S LOW(RS)	LATEST(RS)	FALL(%)
FEDERAL BANK	72.45	68.50	69.45	-4.14
BANK OF BARODA	164.60	157.10	158.05	-3.98
PUNJAB NATL.BANK	136.00	128.65	131.70	-3.16
DHANLAXMI BANK	24.70	23.90	23.95	-3.04
ORIENTAL BANK	120.45	115.75	116.95	-2.91
ANDHRA BANK	52.25	50.50	50.75	-2.87
BANK OF INDIA	118.10	113.55	114.80	-2.79
DCB BANK	109.25	105.60	106.30	-2.70
J & K BANK	61.50	59.45	59.85	-2.68
ST BK OF BIKANER	720.00	690.00	701.00	-2.64
S B T	566.45	542.60	551.50	-2.64
INDIAN BANK	247.90	237.35	241.40	-2.62
ST BK OF MYSORE	566.00	543.95	551.45	-2.57
I O B	25.40	24.70	24.75	-2.56
ST BK OF INDIA	262.75	251.65	256.05	-2.55
ALLAHABAD BANK	69.10	66.55	67.35	-2.53
KARNATAKA BANK	108.95	104.30	106.20	-2.52
CANARA BANK	316.90	304.25	309.25	-2.41
IDFC BANK	66.70	64.95	65.10	-2.40
CORPORATION BANK	45.80	44.25	44.70	-2.40
Nifty50	8190.45	8077.50	8105.00	-1.0
Nifty PSU Bank	3201.15	3069.20	3117.65	-2.6
Nifty Bank	18588.75	17952.60	18237.80	-1.9