Shares banking stocks have rallied second day on a row on the bourses on hopes that the Reserve Bank India (RBI) would announce a cut in key interest rates at its policy meet scheduled for tomorrow.
The finance ministry wants the central bank to change its policy stance, with growth concerns occupying centre stage and inflation showing signs of moderating, the report suggests.
The monetary tightening had hurt growth; the RBI should cut policy rates to give a push to rate-sensitive sectors, the report added quoting a ministry official.
The central bank in its mid-quarter review last month had paused in its rate tightening cycle and said that further rate hikes would not be needed if inflation continues its easing trend. It has raised interest rates 13 times since March 2010 to tame stubbornly high inflation.
The Bombay Stock Exchange (BSE), banking index, Bankex the largest gainer among the sectoral indices is up 160 points or 1.5%, compared with 4 points gain the benchmark index Sensex.
Among the individual stocks, ICICI Bank, State Bank of India, Punjab National Bank, Axis Bank, Yes Bank, Union Bank of India and Bank of India are trading higher in the range of 1-3% on the BSE.
