Following the Reserve Bank of India's (RBI) 50 basis points repo rate cut, the Nifty Bank index scaled a new record high of 56,305. The index has recovered 800 points from its previous lows.
Shares of other rate sensitive sectors like realty and auto also saw positive movement, with gains of over 4%.
Among realty stocks, DLF, Prestige Estates Projects, Sobha, Godrej Properties, and Oberoi Realty were leading the gains.
Of the 15-pack Nifty Auto index, as many as 13 stocks were trading in the green, while two were in the red.
Banking stocks like Bank of Baroda, IDFC First Bank, Punjab National Bank, Axis Bank and other stocks rallied too.
The interest rate cut marked the third straight rate cut by the central bank, following two previous ones in February and April. With this, the repo rate now stands at 5.5% from 6% earlier.
In addition, the RBI has also cut its Cash Reserve Ratio (CRR) by 100 basis points. The cut in CRR will release up to ₹2.5 lakh crore liquidity in the system and reduce the cost of funding for banks, RBI Governor Sanjay Malhotra said in his address.
"CRR cut is a huge positive. Our estimates and very early estimates, it would mean about 4-5 bps positivity on NIMs at this point in time. One must also understand that there is a cut. As far as assets, assets will reprice faster than deposits, but the CRR cut itself, if you look at it in isolation, would be about 4-5 basis points," said Rajiv Anand, Deputy Managing Director at Axis Bank.
The Standard Deposit Facility (SDF) rate and the Marginal Standing Facility (MSF) rate have also been adjusted by 50 basis points in response to the repo rate cut.
With today's interest rate cut, the MPC has now slashed interest rates by 100 bps since February 2025. The governor added that having cut repo rates in quick time, the committee is of the view that there is now very little policy room to support growth.
The repo rate is the interest rate at which the central bank lends short-term funds to commercial banks.
Shares of other rate sensitive sectors like realty and auto also saw positive movement, with gains of over 4%.
Among realty stocks, DLF, Prestige Estates Projects, Sobha, Godrej Properties, and Oberoi Realty were leading the gains.
Of the 15-pack Nifty Auto index, as many as 13 stocks were trading in the green, while two were in the red.
Banking stocks like Bank of Baroda, IDFC First Bank, Punjab National Bank, Axis Bank and other stocks rallied too.
The interest rate cut marked the third straight rate cut by the central bank, following two previous ones in February and April. With this, the repo rate now stands at 5.5% from 6% earlier.
In addition, the RBI has also cut its Cash Reserve Ratio (CRR) by 100 basis points. The cut in CRR will release up to ₹2.5 lakh crore liquidity in the system and reduce the cost of funding for banks, RBI Governor Sanjay Malhotra said in his address.
"CRR cut is a huge positive. Our estimates and very early estimates, it would mean about 4-5 bps positivity on NIMs at this point in time. One must also understand that there is a cut. As far as assets, assets will reprice faster than deposits, but the CRR cut itself, if you look at it in isolation, would be about 4-5 basis points," said Rajiv Anand, Deputy Managing Director at Axis Bank.
The Standard Deposit Facility (SDF) rate and the Marginal Standing Facility (MSF) rate have also been adjusted by 50 basis points in response to the repo rate cut.
With today's interest rate cut, the MPC has now slashed interest rates by 100 bps since February 2025. The governor added that having cut repo rates in quick time, the committee is of the view that there is now very little policy room to support growth.
The repo rate is the interest rate at which the central bank lends short-term funds to commercial banks.
First Published: Jun 6, 2025 10:46 AM IST
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