Mumbai: On Friday last week, RBI Governor Sanjay Malhotra announced a 50 basis points cut in the repo rate. The rate was reduced from 6 percent to 5.50 percent. This is the third repo rate cut this year. Along with this, the RBI also cut the CRR (Cash Reserve Ratio) by 100 basis points. These steps are aimed at supporting economic growth.
PSU Bank Stocks Jump
Following the news, PSU bank stocks saw a strong rise. The Nifty PSU Bank index was up by 1.62 percent. All 12 PSU bank stocks in the index were trading higher.
UCO Bank was the top gainer, rising 4.13 percent to Rs 34.30.
Indian Overseas Bank (IOB) was up 3.81 percent to Rs 41.14.
Punjab and Sind Bank traded at Rs 33.69, up by 2.69 percent.
Bank of Maharashtra was at Rs 55.65.
Bank of India rose 2.74 percent to Rs 128.
Central Bank of India gained 2.28 percent.
Union Bank of India rose 2.26 percent.
Punjab National Bank (PNB) increased by 2.07 percent.
Indian Bank was up 1.73 percent.
State Bank of India (SBI) and Bank of Baroda also rose by 0.98 percent and 0.95 percent respectively.
Private Banks Also in Green
Private bank stocks also traded higher. The Nifty Private Bank index saw 9 out of 10 stocks in the green.
RBL Bank was the top gainer among private banks, rising 4.95 percent.
Bandhan Bank was up 4.62 percent.
Kotak Mahindra Bank increased by 2.79 percent.
Axis Bank rose 1.96 percent.
IndusInd Bank gained 1.39 percent.
IDFC First Bank added 1.31 percent.
Yes Bank, Federal Bank, and HDFC Bank were also trading higher.
ICICI Bank was the only private bank stock in red.
Financial Services Stocks Also Rise
The Nifty Financial Services index showed strong buying too. 15 out of 20 stocks in this index were trading higher, reflecting strong market support after the RBI’s move.
Overall, the RBI’s decision to cut the repo rate gave a big boost to banking and financial stocks.
