Twelve bank shares rose 0.19% to 2.08% at 12:08 IST on BSE, in volatile trade after the Reserve Bank of India kept key rates unchanged in its third bi-monthly monetary policy review today, 5 August 2014
Among PSU bank stocks, Bank of Baroda (up 2.08%), State Bank of India (up 0.62%), Punjab National Bank (up 1.71%), Union Bank of India (up 1.47%), IDBI Bank (up 0.72%), Bank of India (up 1.18%) and Canara Bank (up 1.73%) gained.
Among private bank stocks, Axis Bank (up 0.77%), IndusInd Bank (up 0.29%), Kotak Mahindra Bank (up 0.19%), HDFC Bank (up 0.55%) and Yes Bank (up 0.42%) edged higher. ICICI Bank shed 0.24%.
The BSE Bankex was up 0.3% at 17,501.78. It outperformed the Sensex, which was up 0.18% at 25,769.88.
The BSE Bankex had underperformed the market over the past one month till 4 August 2014, falling 2.1% compared with 0.92% fall in the Sensex. The index, however, outperformed the market in past one quarter, surging 18.78% as against Sensex's 14.82% rise.
The Reserve Bank of India (RBI) in its third bi-monthly monetary policy review today, 5 August 2014, kept policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8%. It also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4% of net demand and time liabilities (NDTL) and reduced the statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points from 22.5% to 22% of their NDTL with effect from the fortnight beginning 9 August 2014. The RBI also cut the ceiling on debt that must be held-to-maturity (HTM) by half a percentage point to 24%.
Since the second bi-monthly monetary policy statement of June 2014, global economic activity has been picking up at a modest space from a sharp slowdown in Q1. Investor risk appetite has buoyed financial markets, partly drawing strength from assurances of continuing monetary policy support in industrial countries, RBI said.
In the second bi-monthly policy review on 1 April 2014, the RBI had kept its policy rate unchanged and lowered the SLR requirement of banks to 22.5% from 23% earlier.
Powered by Capital Market - Live News
