Rate-sensitive bank, financial stocks gain after RBI policy

The benchmark repurchase (repo) rate has been left unchanged at 4 per cent, RBI Governor Shaktikanta Das said while announcing the decisions taken by the Monetary Policy Committee (MPC). Consequently, the reverse repo rate will also continue to earn 3.35 per cent for banks for their deposits kept with RBI.

Rate-sensitive bank and financial stocks gained on Friday after the Reserve Bank of India (RBI) left benchmark interest rate unchanged at 4 per cent but retained an accommodative stance. ICICI Bank was the top gainer in the Sensex pack, rising 3.64 per cent.

Other bank counters also witnessed buying with Axis Bank, RBL Bank, SBI, HDFC Bank, Bandhan Bank and Federal Bank gaining up to 3.64 per cent. The BSE Bank index rose by 2.64 per cent at close of trade following gains in its components. The benchmark repurchase (repo) rate has been left unchanged at 4 per cent, RBI Governor Shaktikanta Das said while announcing the decisions taken by the Monetary Policy Committee (MPC).

Consequently, the reverse repo rate will also continue to earn 3.35 per cent for banks for their deposits kept with RBI. Shares of Repco Home Finance, LIC Housing Finance, PNB Housing Finance, GIC Housing Finance, Indiabulls Housing Finance also jumped up to 7.23 per cent.

Following rally in these companies, BSE Finance index rose by 1.82 per cent. "The outcome of MPC meet was largely in-line with expectations. Rates have been kept unchanged and stance remains accommodative. As the economy continues to be in a fragile state, recovery in growth assumes primacy. The RBI's intent to support the economy even in the wake of rising inflation is comforting," said Dhiraj Relli, MD & CEO, HDFC Securities. The realty pack, reversed its early gains and the index declined 1.58 per cent at close of trade. Counters like Oberoi Realty, Sobha, DLF and Indiabulls Real Estate dipped up to 3.22 per cent.

Auto index was also in the red and declined 0.30 per cent. Tata Motors, Bajaj Auto, Maruti Suzuki India and Mahindra & Mahindra dipped up to 1.74 per cent. Benchmark Sensex rallied 327 points to close at 40,509.49. PTI SUM  RUJ RUJ.