Banking Stocks Witness Selloff After RBI Policy

After the panel's three-day meeting on June 4, RBI Governor Shaktikanta Das announced important rate decisions on Friday.

The Reserve Bank of India (RBI) chose 'Status Quo' for the sixth time in a row, sending Indian markets into a tailspin. The Reserve Bank of India announced its second bi-monthly monetary policy for FY22 on Friday.

Following the announcement of the RBI policy, the Nifty 50 index retreated from its all-time highs and was trading flat. Similar feelings were seen on the Sensex. Stocks in the banking sector have been under selling pressure.

The Bank Nifty has dropped over 255 points at 35,649. The index hit an intraday high of 35,810.90 and a low of 35,810.90, respectively. PNB, Bandhan Bank, SBI, HDFC Bank, Kotak Bank, IDFC First Bank, RBL Bank, and Federal Bank all saw their stock prices drop by 0.5-1.5 percent.

Heavyweights HDFC Bank, SBI, ICICI Bank, Axis Bank, and PNB all fell by approximately 1%, putting the most pressure on the sector.

After a three-day meeting of the MPC, which took place amid mixed economic and inflation indications, the RBI kept interest rates unchanged at 4.00%.

CPI inflation is expected to be 5.1 percent in FY21-22, according to RBI governor Shaktikanta Das, who cited reasons such as the coronavirus pandemic, PMI data, enterprises that have adapted to pandemic operating, and the anticipation of a normal monsoon. For the fiscal year FY22, real GDP is predicted to be 9.5 percent.