Banking Stocks Surge as RBI Injects Liquidity Boost

Rate-sensitive stocks surged nearly 8% after the Reserve Bank of India announced a liquidity injection of Rs 1.5 lakh crore. This decision is expected to ease liquidity conditions, raising hopes for an interest rate cut in the upcoming policy meeting, positively impacting sectors like banking and auto.

In a move that sent banking stocks soaring, the Reserve Bank of India (RBI) announced a Rs 1.5 lakh crore liquidity injection into the financial system. This measure is expected to ease liquidity pressures and heighten anticipation for a potential interest rate cut at the forthcoming RBI policy meeting.

The financial markets reacted positively, with rate-sensitive shares jumping nearly 8%. Notably, sectors such as realty, finance, banking, and auto led the gains. Among the top performers were Axis Bank and HDFC Bank, which posted significant increases in their share prices.

Meanwhile, the broader market experienced underperformance, but indices like the BSE Bankex and BSE Financial Services saw substantial climbs. The RBI also detailed plans to purchase government securities and conduct a USD/INR swap auction to further support liquidity management.

(With inputs from agencies.)