Banking and financial stocks are seeing a huge rally today, with major lenders soaring as much as 6% intra-day. This surge in the banking stocks comes on the back of a host of reasons including rate cuts by the Reserve Bank of India (RBI) and positive investor sentiment in response to key policy changes.
Let’s take a look at the there reasons behind this rally and also know who are key movers at this hour-
1. RBI’s repo rate cut
The recent RBI’s decision to cut the repo rate by 0.25% to 6% has sent ripples through the financial markets. As a result of this latest development, banks have started adjusting their interest rates accordingly.
Moreover, this rate cut is seen as a positive measure to strengthen economic growth. This is also seen as a proactive step in managing inflation, which is currently below the target. By lowering the cost of borrowing, this is expected to benefit both businesses and individual borrowers.
2. Banks slash deposit rate
Following the RBI’s decision, several major banks in the country such as HDFC Bank, Yes Bank, and Bank of India, have slashed their fixed deposit interest rates. This in a way points out that the depositors may earn slightly lower returns, but also shows the banks efforts to align with the central bank’s policy.
3. Lending rate cuts
Alongside the reduction in deposit rates, the lenders have also lowered their lending rates. This also adds some relief to borrowers. Several leading banks like State Bank of India (SBI), Bank of India, and Bank of Maharashtra have cut their lending rates by 0.25%.
Top banking stocks at this hour
At this hour, banking stocks are enjoying strong gains across the board. The Nifty Bank Index has surged by 2.39%. Among the top gainers are-
IndusInd Bank, surging over 6%, the bank has been one of the standout performers. HDFC Bank is up by 3%, Axis Bank rose nearly 3% and ICICI Bank gained over 2% at this hour.
Other banks like IDFC First Bank and SBI have also posted gains of around 2%.