Bankers and analysts had factored in a repo rate cut of 25 basis points and the RBI move to cut rates by 50 basis points saw the bank Nifty gain just 39 points. State Bank of India, ICICI Bank and HDFC Bank were up marginally, while Punjab National Bank and Bank of Baroda were down marginally.
Banking stocks which had rallied sharply when the 50 basis points repo rate cut was announced remained subdued following subtle hints that a further rate cuts may not be forthcoming given inflation concerns.
Also, there is a certain amount of surpressed inflation in the system as petrol prices have not been hiked.
The markets were trading higher following the RBI's move to cut repo rates, with the BSE Sensex and the Nifty trading higher by 100 points and 30 points respectively.