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Banking stocks decline after RBI hikes repo rate

Besides, Allahabad Bank, Canara Bank, HDFC Bank, SBI, Central Bank, ICICI and Corporation Bank are also down in the range of 7% to 5% on BSE.

September 20, 2013 12:06 IST | India Infoline News Service
The BSE Bankex index is 5.91% down at 11:55 AM after the Reserve Bank of India (RBI) hiked the repo rate by 25 bps (basis points) to 7.5% today.
The BSE Bankex Index had gained 6.78% on Thursday.

The RBI in its monetary policy statement kept the CRR unchanged at 4%, while it hiked the repo rate by 25 bps (basis points) to 7.5% and consequently the reverse repo rate stands at 6.5%.

The central bank has reduced daily CRR requirement to 95% from 99% and maintained MSF rate to 75 bps to 9.5%.

According to RBI, timing of more action on liquidity depends on stable rupee. Further action on liquidity growth may pick up in October-March if infra projects are on stream, the central bank added.

The RBI steps intended to address inflationary pressures and to mitigate pressure on rupee. There is “No room for complacency for inflation,” RBI said.
At 11:57 AM (IST), S&P BSE Sensex is 495 points down at 20,150 as market participants are booking profits and reshuffling their portfolio after the RBI announcement.

The other banks which have taken a beating include Union Bank (-8.61%), IndusInd Bank (-7.63%), Uco Bank (-7.56%), Bank of India (-7.43%), Dena Bank (-7.13%), Syndicate Bank (-7.09%) and Indian Bank (-7.09%).

Besides, Allahabad Bank, Canara Bank, HDFC Bank, SBI, Central Bank, ICICI and Corporation Bank are also down in the range of 7% to 5% on BSE.

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