Bank stocks gain on Govt, RBI measures; ICICI leads rally
Flying high on the RBI and government measures to boost money supply into the system, banking stocks surged in early trade, led by ICICI Bank, which gained over eight per cent.india Updated: Dec 08, 2008 13:22 IST
Flying high on the RBI and government measures to boost money supply into the system, banking stocks surged in early trade, led by ICICI Bank, which gained over eight per cent.
The Reserve Bank of India on Saturday announced one percentage point cut in the short term rates, at which it lends and borrows from banks, along with a slew of other measures.
The short-term lending rate (repo) would fall to 6.5 per cent and borrowing (reverse repo) rate to five per cent with effect from December 8. The primary liquidity made available to the system through various RBI measures since October this year is worth over Rs 3,00,000 crore.
Country's largest private sector lender ICICI Bank surged 8.24 per cent at Rs 388. It was later trading at Rs 368.50 and over 12.57 lakh shares changed hands on the Bombay Stock Exchange.
Also HDFC Bank jumped 7.86 per cent to a high of Rs 958.80, while Yes Bank surged 6.96 per cent to Rs 69.90.
Country's largest lender State Bank of India jumped 5.67 per cent to a high of Rs 1,200 on the BSE. Over 3.75 lakh shares changed hands on the exchange.
In its stimulus package yesterday, the government said that the public sector banks would soon unveil a package for those seeking home loans of up to Rs 20 lakh and promised measures that would accelerate the "growth trajectory".
Among the PSU lenders, Punjab National Bank gained 5.14 per cent to Rs 454.50, Canara Bank rose 5.02 per cent to Rs 174.50 and Bank of India advanced 4.24 per cent at Rs 255.80.
Other major gainers included Axis Bank (3.14 per cent), Bank of Baroda (4.18 per cent) and Kotak Mahindra Bank (6.76 per cent).
The banking index - Bankex - surged six per cent at 4,989.56 points in the early trade.