Banking Stocks Recover after RBI Credit Policy

Banking stocks recovered in today's trade, though after falling intially after the Reserve Bank of India kept interest rates steady in its policy meet, largely in line with expectations.

Rate sensitive stocks fell initially in today's trade. However, recovered on hints that the RBI will cut interest rates in the next policy or even outside the policy.

"Liquidity conditions have eased considerably in Q3 of 2014-15 due to structural and frictional factors, as well as the fine tuning of the liquidity adjustment framework. With deposit mobilisation outpacing credit growth and currency demand remaining subdued in relation to past trends, banks are flush with funds, leading a number of banks to reduce deposit rates," the RBI has noted.

Shares of PSU banks, Allahabad Bank was up more then 6 per cent, Syndicate Bank rose 7 per cent, IDBI was up 3.75 per cent, Andhra Bank rose 4 per cent and IOB rose 2.3 per cent were the top gainers.

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