Banking shares trading higher by up to 3% on the bourses after the Wholesale Price Index (WPI) based inflation moderated for the third straight month and is likely to increase the clamour for the Reserve Bank of India (RBI) to cut interest rates in its next monetary policy.
Oriental Bank of Commerce, IndusInd Bank and YES Bank are up more than 3% each, while Union Bank of India, Punjab National Bank, State Bank of India, Bank of Baroda and Bank of India are up 2% each on the National Stock Exchange (NSE).
The NSE banking share index, Bank Nifty was up 1.56% compared to 0.88% rise in the benchmark CNX Nifty at 1000 hours.
The headline inflation, which has eased to a nine month low of 4.68% in February 2014, has been on the downward trajectory since the last few months essentially due to a fall in food and fuel prices. Inflation was at 5.05% in January 2014 and 7.28% in February 2013.
The moderation in inflation should induce the RBI to make a shift towards a more accommodative monetary policy stance to revive investment and propel demand especially as investment demand is declining and consumer durables are in the red. Besides, core inflation, which tracks demand side pressures in the economy, continues to be stable, says Director General, CII.
Oriental Bank of Commerce, IndusInd Bank and YES Bank are up more than 3% each, while Union Bank of India, Punjab National Bank, State Bank of India, Bank of Baroda and Bank of India are up 2% each on the National Stock Exchange (NSE).
The NSE banking share index, Bank Nifty was up 1.56% compared to 0.88% rise in the benchmark CNX Nifty at 1000 hours.
The headline inflation, which has eased to a nine month low of 4.68% in February 2014, has been on the downward trajectory since the last few months essentially due to a fall in food and fuel prices. Inflation was at 5.05% in January 2014 and 7.28% in February 2013.
The moderation in inflation should induce the RBI to make a shift towards a more accommodative monetary policy stance to revive investment and propel demand especially as investment demand is declining and consumer durables are in the red. Besides, core inflation, which tracks demand side pressures in the economy, continues to be stable, says Director General, CII.
