Among the PSU bank stocks, UCO Bank led the rally, rising 2.8% to Rs 51.10, followed by Canara Bank, which was up 2.4% to Rs 110.75. Bank of Baroda traded higher by 2% to Rs 264.95.
State Bank of India shares inched up 1.2% to Rs 875.50 after the Reserve Bank of India’s monetary policy decision.
Axis Bank led the gains among the private lenders, rising 2% to Rs 1189.4 after the central bank’s announcement. ICICI Bank was up 1% to Rs 1,347.
CRR is a percentage of a bank’s deposits that must be kept with the RBI as reserves.
The RBI kept the repo rate unchanged at 6.5% for the 11th straight meeting and maintained its ‘neutral’ stance. RBI Governor Shaktikanta Das also slashed the real GDP growth projection for FY25 to 6.6% from 7.2%.The Nifty Auto index tracked the overall bullish sentiment to gain 0.5%, as Bajaj Auto, M&M, and Eicher Motors lifted the index, advancing between 1% and 2.5%.The Nifty Realty index was also higher, with Prestige leading advances, adding about 1%.
The RBI has held the repo rate despite lower GDP growth because of higher inflation of 6.21% in October, the recent weakening of the INR against the dollar to 84.7 along with the need to boost the overall savings rate in the economy, said Suresh Darak, Founder at Bondbazaar.
“Bond markets had largely priced in a no rate change scenario with minor movements in the benchmark 10-yr G-Sec yield. Going ahead if inflation cools down, we may see a rate cut early next year to prop up the economy and boost GDP growth,” Darak said.
The reduction in the cash reserve ratio (CRR) aligns with the central bank’s neutral policy stance, reflecting a balanced approach to managing liquidity while maintaining economic stability.
Also read | Bond yields fall 10 bps since GDP data. What is the market expecting?
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