Banking stocks gain as RBI keeps policy rates unchanged

Banking stocks are trading higher even as RBI has kept the key rates unchanged on Tuesday. J&K Bank , SBI , Indian Bank , Yes Bank, Federal Bank, Corporation Bank and Karur Vysya Bank are all up anywhere between 1.50 per cent to 8.4 per cent.

RBI on Tuesday kept the reverse repo rate, repo rate and CRR unchanged in line with market expectations. The RBI statement comes a day after the Finance Minister showed support for cleaning up the bad loans for all the public sector banks while highlighting the government's preparedness to provide further funds to clean the balance sheets of PSBs. 

Broader market is rallying on Tuesday with Sensex trading higher by 108 points at 26,886 on an intra-day basis post the policy announcement by RBI backed by the positivity in the Asian markets which are trading higher. 

Now that the key policy rates are kept unchanged the market will focus on the next policy announcement and other global events such as BREXIT and US Fed rate. Based on the commentary by the governor, experts are speculating whether there will be any further rate cuts owing to the upside inflation risks.

J&K Bank is the biggest gainer amongst the banks and is trading up by almost Rs 4.70 or 8.30 per cent at Rs. 62.70. SBI is up by almost 2.24 percent at Rs. 203.35 per share. ICICI bank amongst the private banks is up by almost 2.81 per cent at Rs. 250 per share.