RBI turns dovish, but bank stocks tumble

RBI turns dovish, but bank stocks tumble

Mumbai: Local markets seem to have shrugged off the 25 basis points interest rate hike by the Reserve Bank of India in its quarterly monetary policy review. After all, it was widely expected. But the initial surge in the markets – a factor of rising Asian markets and hopes of a solution to the Euro debt problem – soon dissipated. At 12:45 pm (local time), equities were barely trading up from the previous close, despite a dovish statement from the Central bank. With the bank also warning about the fiscal deficit leading to demand pressures, therefore there is nothing much for the markets to cheer.

Sensex – 16969.7, + 0.2%

Bankex 10,747.27, -2.76%

HDFC Bank Rs455.3, -5.95%

Axis Bank Rs1,113, -4.77%

ICICI Bank Rs859.5, -9.8%

SBI Rs1,836, -71.2%

PNB Rs935.5, -35.8%