Banking stocks stole the spotlight on Tuesday as the broader markets continued their winning streak, driven by a mix of interest rate cuts and improved investor sentiment.
IndusInd Bank was the standout performer, soaring 6.84% on the BSE. Other private sector lenders followed suit, Axis Bank jumped 4.18%, HDFC Bank rose 3.23%, and ICICI Bank gained 2.86%.
Public sector banks also saw healthy gains with Canara Bank which 2.40%, Yes Bank climbed 2.10%, and State Bank of India advanced 1.23%. Bank of Baroda added 1.10%, Federal Bank 0.84%, and Kotak Mahindra Bank edged up 0.44%.
The BSE Bankex index closed 2.51% higher at 59,866.95.
"Banking stocks benefited from deposit rate cuts," said Vinod Nair, head of research at Geojit Financial Services.
The rally in bank shares came as the markets posted strong gains for a second consecutive session. The BSE Sensex surged 1,577.63 points, or 2.10%, to end the day at 76,734.89. Meanwhile, the NSE Nifty climbed 500 points, or 2.19%, to close at 23,328.55.
In a move to make lending cheaper, State Bank of India, country's largest lender, announced a 25-basis point cut in its repo linked lending rate (RLLR), bringing it down to 8.25%. This followed the Reserve Bank of India’s decision to slash the repo rate by 25 basis points last week, the second such cut in a row.
In addition to lending rate cuts, SBI also trimmed its deposit rates by 10 to 25 basis points, effective from April 15.
Private sector giant HDFC Bank lowered its savings account interest rate by 25 basis points to 2.75% — the lowest among private peers.
Meanwhile, Bank of India scrapped its 400-day special deposit scheme offering 7.3% and slashed home loan rates by 25 basis points, offering relief to both new and existing borrowers.
With interest rates on the decline, the banking sector looks poised to benefit from improving loan demand and better credit offtake in the coming quarters.
IndusInd Bank was the standout performer, soaring 6.84% on the BSE. Other private sector lenders followed suit, Axis Bank jumped 4.18%, HDFC Bank rose 3.23%, and ICICI Bank gained 2.86%.
Public sector banks also saw healthy gains with Canara Bank which 2.40%, Yes Bank climbed 2.10%, and State Bank of India advanced 1.23%. Bank of Baroda added 1.10%, Federal Bank 0.84%, and Kotak Mahindra Bank edged up 0.44%.
The BSE Bankex index closed 2.51% higher at 59,866.95.
"Banking stocks benefited from deposit rate cuts," said Vinod Nair, head of research at Geojit Financial Services.
The rally in bank shares came as the markets posted strong gains for a second consecutive session. The BSE Sensex surged 1,577.63 points, or 2.10%, to end the day at 76,734.89. Meanwhile, the NSE Nifty climbed 500 points, or 2.19%, to close at 23,328.55.
In a move to make lending cheaper, State Bank of India, country's largest lender, announced a 25-basis point cut in its repo linked lending rate (RLLR), bringing it down to 8.25%. This followed the Reserve Bank of India’s decision to slash the repo rate by 25 basis points last week, the second such cut in a row.
In addition to lending rate cuts, SBI also trimmed its deposit rates by 10 to 25 basis points, effective from April 15.
Private sector giant HDFC Bank lowered its savings account interest rate by 25 basis points to 2.75% — the lowest among private peers.
Meanwhile, Bank of India scrapped its 400-day special deposit scheme offering 7.3% and slashed home loan rates by 25 basis points, offering relief to both new and existing borrowers.
With interest rates on the decline, the banking sector looks poised to benefit from improving loan demand and better credit offtake in the coming quarters.
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