Banking stocks subdued as Rajan prefers status quo

ICICI Bank has edged lower, while HDFC Bank, Axis Bank and SBI are virtually unchanged.

The banking stocks are trading flat, with a negative bias, after the Reserve Bank of India left the key interest rate unchanged in its monetary policy review. The Bank Nifty is at 15,221, lower by 0.4%. The Sensex is sluggish, up 16.53 points at 24,701 and the Nifty is up three points at 7366.05. 

 

The central bank has kept the repo rate unchanged at 8% and cash reserve ratio unchanged at 4%; it has, however, reduced the statutory liquidity ratio by 50 basis points to 22.5%.

 

Today's bi-monthly policy review is the first after Prime Minister Narendra Modi assumed office on May 26.

 

The rupee slipped 3 paise to 59.18 against the dollar in the aftermath of the policy announcement.

 

ICICI Bank has weakened by 0.6% at Rs 1453, HDFC Bank has shed 0.5% at Rs 815, Axis Bank and SBI are virtually unchanged at Rs 1900 and Rs 2642 respectively. 
 

The midcap banking space is however, underperforming the banking index. Central Bank has shed 2.7% at Rs 81, Allahabad Bank has lost 2.3% at Rs 131, Indian Bank has shed 2.2% at Rs 172, Andhra Bank has lost 1.4% at Rs 99, Bank of India has lost 1.4% at Rs 319 and Oriental Bank has lost 1.3% at Rs 353.