Bank Stocks Jump As RBI Hikes Repo Rate By 50 BPS, This Bank Gained Most

The Reserve Bank of India (RBI) on Friday hiked the repo rates by 50 basis points, largely in line with expectations to tame the stubborn inflation. Repo rates are interest rates charged by the Reserve Bank of India, when lending to banks. The rate setting, Monetary Policy Committee (MPC), which met over the last few days may have considered elevated inflation levels (7% in August) and a weak Rupee as key reasons to increase the repo rate by 50 basis points. This is the fourth consecutive rate hike and the third half percentage point increase.

The banking stocks have jumped in morning trade. The 12-share Nifty Bank has surged sharply by 1.43% at 38,184 in morning trade. Nifty Bank touched the intraday high so far at 38,232 and low at 37,386.

Heavyweights like State Bank Of India gained 1.66% at Rs 530 apiece, IndusInd Bank Ltd gained 1.65% at Rs 1161 apiece, Axis Bank jumped 1.60% at 730 apiece, Bank of Baroda rose sharply by 2.63% at 130 piece, Bank of India jumped by 0.73% at 48.50 apiece, Bank of Maharashtra rose by 0.57% at 17.55 apiece, AU Small Finance Bank Ltd was higher by 0.90% at 605 apiece, ICICI Bank gained 1.64% at 857 apiece in morning trade at around 10:49 am.

Meanwhile, HDFC Bank registered a gain of 1.78% at Rs 1406, Kotak Mahindra Bank was on a roll with a gain of 1.93% at Rs 1799, IDFC First Bank Ltd gained 1.57% at 48.40, Federal Bank rose by 2.25% at Rs 115 apiece, and Bandhan Bank surged by 1.34% at Rs 264 apiece.

Bank of Baroda gained the maximum with 2.63% at Rs 130 apiece.

Meanwhile, retail inflation remained way above the RBI's tolerance level of 2 to 6%. At the international level, inflation has been soaring and central banks across the globe have been increasing rates sharply to control inflation. The US Federal Reserve has also hiked Fed rates by 75 basis points earlier this month in September. While a rate hike by the RBI was almost certain, the quantum of rate hike varied between 35 basis to 50 basis points. However, most analysts had rightly predicted a 50 basis points hike.

Check the list below of all the banking stocks: