- MUMBAI — The
Nifty Bank index touched a record high of 56,161.40 on Tuesday ahead of the
crucial RBI MPC meeting.
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- The surge was driven by strong buying in select banks as
investors showed optimism ahead of a possible interest rate cut by the Reserve
Bank of India (RBI) later this week.
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- However, the early gains didn’t last. By mid-morning, the
index had slipped slightly, down 0.1 per cent as some investors booked profits
and heavyweight banks showed weakness.
Also read: Another RBI rate cut to spark affordable real estate momentum — Experts
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- Major lenders like ICICI Bank, Axis Bank, and Kotak Mahindra
Bank dragged the index lower, falling up to 0.9 per cent.
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- In contrast, smaller banks like AU Small Finance Bank,
Federal Bank, Punjab National Bank, HDFC Bank, and IndusInd Bank saw gains
between 0.4 per cent and 1.2 per cent.
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- Despite the pullback, the Nifty Bank index is still one of
the top-performing indices in 2025. It has gained 10 per cent since the start
of the year and is up 15 per cent from its 52-week low.
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- Over the past 12 months, it has delivered a return of 9.7
per cent. The market is now focused on the RBI’s upcoming policy decision on
June 6.
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- Many analysts expect the central bank to cut the key lending
rate, or repo rate, by another 25 basis points.
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- Under Governor Sanjay Malhotra, the RBI has already cut
rates twice this year, reducing the repo rate from 6.5 per cent to 6 per cent.
Experts believe the conditions are right for further easing.
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- Adding to market optimism, India’s economy grew by 7.4 per
cent in the March quarter (Q4) of FY25, the strongest growth of the year.
