How RBI's rate hike impacts Bank stocks? Bank of Baroda, SBI among top gainers

8 Jun 2022 , 12:29 PM

The Reserve Bank of India has announced a hike in repo rate by 50 basis points to 4.90% to tackle inflation in the country.

Nifty Bank advanced 0.92% post the rate hike by RBI. Bank stocks are the most sensitive to any changes in the policy rate by RBI. Consequently, all stocks on Bank Nifty advanced post RBI’s rate hike.

This rate hike is in line with the expectations of investors, and now the broader focus will be on the Fed rate hike.

Bank of Baroda (+2.94%) emerged as the top gainer so far with nearly 3% gain, followed by State Bank of India (+2.15%), and HDFC Bank (1.20%). IDFC First Bank (+1.15%), Kotak Bank (+0.91%) added nearly 1%.

Federal Bank (+0.88%), PNB (+0.80%), and Bandhan Bank (+0.75%) also remained on a marginal upside. AU SFB (+0.54%), ICICI Bank (+0.53%), IndusInd Bank (+0.15%), and Axis Bank (+0.02%) rallied the chart further with marginal add-ons.

The bank sector has witnessed quite a volatility over the past few months. However, the sector drives comfort from the Q4 earnings season which lent support except for the higher operating costs across the board.

Analysts further stated that bank lending spreads have moderated for state-owned and private sector banks.