Mumbai: Bank stocks were in demand Monday, surging up to 9 percent, ahead of RBI's policy review meeting tomorrow and on hopes of an interest rate cut.
Leading the pack of gainers was Indian Bank which zoomed 8.92 percent, followed by Canara Bank, surging 5.56 percent, Bank of Baroda (4.09 percent) and SBI (3.94 percent) on the BSE.
Among others, ICICI Bank gained 3.40 percent, PNB was up 2.78 percent, AXIS Bank (0.48 percent) and Yes Bank (0.36 percent).
Similarly, Bank of India climbed 2.51 percent, Allahabad Bank rose 1.52 percent, Andhra Bank jumped 1.96 percent and Bank of Maharashtra went up 1.04 percent.
"Banking stocks led the rally on the benchmark indices on hopes of a rate cut by the RBI in the policy tomorrow," said Gaurav Jain, Director at Hem Securities.
On the other hand, HDFC Bank was down 1.49 percent, Kotak Mahindra Bank lost 0.80 percent and Federal Bank (0.44 percent).
The BSE banking index ended the day with 0.99 percent gains at 21,711.73.
Meanwhile, pressure is mounting on RBI to cut interest rate in its third monetary policy review of this fiscal tomorrow. Experts are however of the view that retail inflation may hold it back from doing so.
RBI mostly tracks the consumer price inflation for its monetary policy decision.
In its last review on June 2, RBI cut repo rate 0.25 percent for the third time this year.
Bank stocks also rose after the government announced plans to infuse fresh capital into state-run lenders.
In the broader market, the 30-share Sensex ended the day 72.50 points higher at 28,187.06.
