Banking shares are in focus on the bourses at early trades on hopes of another reduction in the cash reserve ratio (CRR) by the Reserve Bank of India (RBI) to ease the severe liquidity in the system.
The RBI, which is scheduled to announce its mid-quarter monetary policy on March 15, had slashed the CRR by 50 basis points to 5.5% to free primary liquidity worth Rs 32,000 crore. CRR is the portion of deposits that banks keep with RBI.
The National Stock Exchange (NSE), banking index, Bank Nifty has surged almost 2% or 173 points, compared to 1% or 56 points gain in the benchmark index Nifty at 0945 hours.
Among the individual stocks, State Bank of India, Axis Bank, Bank of India, IndusInd Bank and IDBI are trading higher by more than 2% each, while ICICI Bank, HDFC Bank, Punjab National Bank and Canara Bank are up 1-2% each on the NSE.