Bank shares gain on hopes for CRR cut

Mumbai: Banking shares reverse earlier losses on rising hopes of twin cuts in the repo rate and the cash reserve ratio at the RBI meeting on 18 June.

Data showing industrial output grew a weaker-than-expected 0.1% in April from a year earlier, adds to the case of more aggressive action from the RBI, traders say. Inflation data on Thursday will be key: a Reuters poll shows WPI likely accelerated 7.60% in May from a year ago, the fastest pace this year.

Banking shares, as measured by the NSE banking index , gain 0.9% after earlier falling as much as 0.8% before the output data. ICICI Bank gains 0.75%, while SBI Bank gains 1%.

The benchmark BSE index gains 0.2%, while the 50-share NSE index adds 0.2%.