Banking stocks up on rate cut hopes

Reuters Market Eye - Lenders rose on Monday as investors bet on a rate cut in Friday's RBI rate review, with growing hopes of a chunkier 50 bps cut or a lowering of the cash reserve ratio.

The Reserve Bank of India may sweeten its expected 25 basis point interest rate cut with a similar reduction in the cash reserve ratio to ease tight market liquidity conditions as increasingly benign inflation gives it room to manoeuvre.

Shares of HDFC Bank Ltd , India's No.3 lender by loan value, rise 1.25 percent, State Bank of India Ltd is up 2.38 percent, while ICICI Bank gains 1.17 percent.

 

(Reporting by Archana Narayanan)