 "Is it time to consider PSU Banks?")
Shares of public sector undertaking (PSU) banks have moved higher by up to 2% after Raghuram Rajan on Tuesday left interest rates unchanged at 6.5% at his final policy review meeting as Reserve Bank of India (RBI) governor.
State Bank of India (SBI), Canara Bank, Union Bank of India (BOI), Allahabad Bank, Syndicate Bank, Oriental Bank of Commerce, Punjab National Bank (PNB), Bank of Baroda (BOB) and Andhra Bank were up 2% each on the National Stock Exchange (NSE).
At 11:41 am, Nifty PSU Bank index, the largest gainer among sectoral indices, was up 1.8% as compared to 0.08% decline in the benchmark Nifty 50 index. Nifty Bank, the public and private sector bank index, was up 0.31%.
Raghuram Rajan left the repurchase, or repo, rate unchanged at 6.5% as retail inflation for the month of June headed to 5.77%, driven in large part by a spike in food inflation which has the most weightage in the basket of goods used in the Consumer Price Index (CPI). The Cash Reserve Ratio (CRR) was also unchanged at 4%.
“Risks to the inflation target of 5% for March 2017 continue to be on the upside. Furthermore, while the direct statistical effect of house rent allowances under the 7th central pay commission (CPC’s) award may be looked through, its impact on inflation expectations will have to be carefully monitored so as to pre-empt a generalisation of inflation pressures. In terms of immediate outcomes, much will depend on the benign effects of the monsoon on food prices,” the RBI said in its third bi-monthly monetary policy statement.
“The stance of monetary policy remains accommodative and will continue to emphasise the adequate provision of liquidity. Easy liquidity conditions are already prompting banks to modestly transmit past policy rate cuts through their MCLRs and pro-active liquidity management should facilitate more pass-through,” it added. LINK.
State Bank of India (SBI), Canara Bank, Union Bank of India (BOI), Allahabad Bank, Syndicate Bank, Oriental Bank of Commerce, Punjab National Bank (PNB), Bank of Baroda (BOB) and Andhra Bank were up 2% each on the National Stock Exchange (NSE).
At 11:41 am, Nifty PSU Bank index, the largest gainer among sectoral indices, was up 1.8% as compared to 0.08% decline in the benchmark Nifty 50 index. Nifty Bank, the public and private sector bank index, was up 0.31%.
Raghuram Rajan left the repurchase, or repo, rate unchanged at 6.5% as retail inflation for the month of June headed to 5.77%, driven in large part by a spike in food inflation which has the most weightage in the basket of goods used in the Consumer Price Index (CPI). The Cash Reserve Ratio (CRR) was also unchanged at 4%.
“Risks to the inflation target of 5% for March 2017 continue to be on the upside. Furthermore, while the direct statistical effect of house rent allowances under the 7th central pay commission (CPC’s) award may be looked through, its impact on inflation expectations will have to be carefully monitored so as to pre-empt a generalisation of inflation pressures. In terms of immediate outcomes, much will depend on the benign effects of the monsoon on food prices,” the RBI said in its third bi-monthly monetary policy statement.
“The stance of monetary policy remains accommodative and will continue to emphasise the adequate provision of liquidity. Easy liquidity conditions are already prompting banks to modestly transmit past policy rate cuts through their MCLRs and pro-active liquidity management should facilitate more pass-through,” it added. LINK.
