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Banking Stocks Decline: Following the Reserve Bank of India’s decision to cut the repo rate by 25 basis points to 6%, rate-sensitive banking stocks witnessed notable declines. The Nifty Bank index dropped by over 350 points, reflecting investor concerns over narrowing interest margins for banks. Rate cuts, while generally positive for credit growth, can temporarily weigh on bank profitability, particularly for lenders with higher exposure to fixed-rate assets or narrow spreads. As a result, several major banking stocks fell by up to 2%.
| Bank | Price (INR) | Change (INR) | Change (%) |
|---|---|---|---|
| Canara Bank | 87.92 | -1.52 | -1.69% |
| Bank of Baroda | 232.05 | -3.79 | -1.61% |
| State Bank of India | 757.10 | -11.50 | -1.50% |
| Panjab National Bank | 95.67 | -1.24 | -1.28% |
| Axis Bank Ltd. | 1068.10 | -9.75 | -0.91% |
Among the top laggards were Canara Bank, Bank of Baroda, State Bank of India, Punjab National Bank, and Axis Bank. These stocks registered losses between 0.91% and 1.69%, contributing significantly to the decline in the Nifty Bank index. Despite the overall negative sentiment, the move could support medium-term loan demand, though markets appeared to focus on immediate earnings implications for the sector.
