Fifteen bank stocks rose 0.24% to 6.35% at 15:06 IST on BSE after the Reserve Bank of India reduced the key policy repo rate by 25 basis points to 6.25% after the conclusion of the latest monetary policy meeting.
Among the public sector banks, Union Bank of India (up 6.35% at Rs 152.50), Bank of India (up 3.57% at Rs 120.45), Canara Bank (up 3.08% at Rs 329.20), Punjab National Bank (up 2.05% at Rs 146.55), IDBI Bank (up 1.97% at Rs 72.40), State Bank of India (up 1.33% at Rs 258.60), United Bank of India (up 1.17% at Rs 21.60), Bank of Baroda (up 1.04% at Rs 170.50) and Indian Bank (up 0.67% at Rs 225.50) edged higher.
Among private sector banks, Federal Bank (up 1.01% at Rs 75.25), Yes Bank (up 0.92% at Rs 1,282.85), ICICI Bank (up 0.92% at Rs 258.40), Kotak Mahindra Bank (up 0.63% at Rs 792.60), RBL Bank (up 0.3% at Rs 298) and HDFC Bank (up 0.24% at Rs 1,290) edged higher. IndusInd Bank (down 0.84% at Rs 1,221.90) and Axis Bank (down 0.84% at Rs 546.30) edged lower.
The S&P BSE Bankex index was up 0.19% at 22,438.79. It underperformed the Sensex which was up 78.04 points or 0.28% at 28,321.33.
The S&P BSE Bankex index had underperformed the market over the past one month till 3 October 2016, sliding 1.78% compared with 1.01% fall in the Sensex. The index had, however, outperformed the market in past one quarter, gaining 8.63% as against Sensex's 4.05% rise.
The Reserve Bank of India (RBI) after the conclusion of its monetary policy meeting today, 4 October 2016, announced reduction in the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points (bps) to 6.25% from earlier 6.5% with immediate effect. Consequently, the reverse repo rate under the LAF stands adjusted to 5.75% and the marginal standing facility (MSF) rate and the bank rate to 6.75%.
The decision of the Monetary Policy Committee (MPC) is consistent with an accomodative stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5% by Q4 March 2017 and the medium-term target of 4% within a band of plus or minus 2%, while supporting growth. All the six members voted in favour of MPC decision.
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