Shares of public and private sector banks edged higher at 14:30 IST on BSE on speculation that good monsoon will improve the odds for further monetary policy easing from Reserve Bank of India.
Among public sector banks, Indian Bank (up 5.68%), Union Bank of India (up 4.75%), UCO Bank (up 3.87%), Bank of India (up 3.58%), Allahabad Bank (up 3.40%), Andhra Bank (up 3.40%), Punjab National Bank (up 3.33%), Bank of Baroda (up 3.20%), Syndicate Bank (up 3.18%), IDBI Bank (up 3.14%), United Bank of India (up 2.96%), Canara Bank (up 2.84%), Bank of Maharashtra (up 2.48%), State Bank of India (up 2.33%), Vijaya Bank (up 1.97%), Central Bank of India (up 1.84%), Punjab and Sind Bank (up 1.79%), Dena Bank (up 1.78%) and Corporation Bank (up 0.87%), edged higher.
Among private sector banks, Axis Bank (up 3.89%), Yes Bank (up 3.65%), ICICI Bank (up 3.23%), Kotak Mahindra Bank (up 2.91%), HDFC Bank (up 2.06%), Federal Bank (up 1.70%), IndusInd Bank (up 1.53%) and City Union Bank (up 0.10%), edged higher/
The S&P BSE Bankex was up 2.78% at 21,056.13. It outperformed the Sensex, which was up 1.52% at 27,732.61.
The BSE Bankex had underperformed the market over the past one month till 19 June 2015, falling 3.05% compared with 1.19% fall in the Sensex. The index had also underperformed the market in past one quarter, sliding 4.89% as against Sensex's 4.05% fall.
Shares of banks edged higher today, 22 June 2015, on speculation that pick-up in sowing of Kharif crops, above-average monsoon rains during the initial part of the June-September southwest monsoon season, data showing higher water storage in reservoirs and a restrained increase in minimum support prices for Kharif crops announced by the government last week will improve the odds for further monetary policy easing from Reserve Bank of India (RBI).
The RBI cut its main benchmark lending rate viz. the repo rate by 25 basis points after a monetary policy review on 2 June 2015. The central bank at that time said that the monsoon and its impact on food costs will be key to further easing. The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update issued yesterday, 21 June 2015, that the southwest monsoon has further advanced into some more parts of Chhattisgarh, remaining parts of Odisha and West Bengal and some parts of Jharkhand. Conditions are favourable for further advance of southwest monsoon into remaining parts of north Arabian sea, Gujarat state, Chhattisgarh, Jharkhand, entire Bihar, Uttarakhand, Himachal Pradesh, Jammu & Kashmir, most parts of Madhya Pradesh and some parts of Uttar Pradesh, Punjab, Haryana, Chandigarh & Delhi and Rajasthan during next 3-4 days, the IMD said. The Southwest monsoon was vigorous over Odisha, Vidarbha, Coastal Andhra Pradesh, Telangana and South Interior of Karnataka and active over Konkan & Goa and Coastal Karnataka during the past 24 hours ending at 830 hrs, the IMD said.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 11% above the Long Period Average (LPA) until 20 June 2015. Region wise, the southwest monsoon was 22% above the LPA in Central India, 20% above the LPA in South Peninsula, 5% above the LPA in East & Northeast India and 13% below the LPA in Northwest India until 20 June 2015.
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