Bank stocks gain up to 9% ahead of RBI policy

Bank stocks were in demand today, surging up to 9 per cent, ahead of RBI's policy review meeting tomorrow and on hopes of an interest rate cut.
Leading the pack of gainers was Indian Bank which zoomed 8.92 per cent, followed by Canara Bank, surging 5.56 per cent, Bank of Baroda (4.09 per cent) and SBI (3.94 per cent) on the BSE.
Among others, ICICI Bank gained 3.40 per cent, PNB was up 2.78 per cent, AXIS Bank (0.48 per cent) and Yes Bank (0.36 per cent).
Similarly, Bank of India climbed 2.51 per cent, Allahabad Bank rose 1.52 per cent, Andhra Bank jumped 1.96 per cent and Bank of Maharashtra went up 1.04 per cent.

"Banking stocks led the rally on the benchmark indices on hopes of a rate cut by the RBI in the policy tomorrow," said Gaurav Jain, Director at Hem Securities.
On the other hand, HDFC Bank was down 1.49 per cent, Kotak Mahindra Bank lost 0.80 per cent and Federal Bank (0.44 per cent).

The BSE banking index ended the day with 0.99 per cent gains at 21,711.73.
Meanwhile, pressure is mounting on RBI to cut interest rate in its third monetary policy review of this fiscal tomorrow. Experts are however of the view that retail inflation may hold it back from doing so.

RBI mostly tracks the consumer price inflation for its monetary policy decision.
In its last review on June 2, RBI cut repo rate 0.25 per cent for the third time this year.
Bank stocks also rose after the government announced plans to infuse fresh capital into state-run lenders.
In the broader market, the 30-share Sensex ended the day 72.50 points higher at 28,187.06.