PSU banks take Bank Nifty to record high on rate cut hopes

MUMBAI: The Bank Nifty has hit a fresh record high in early trade led by PSU banks on optimism of sooner than expected interest rate cut announcement by the Reserve Bank of India.

The hopes are high after the Organization of the Petroleum Exporting Countries (OPEC) at its meeting in Vienna decided to keep oil production unchanged even as prices have crashed.

India’s 10-year yield hit 8.11 per cent, lowest since 01 August, 2013, on hopes of rate cut as crude oil prices are expected to remain low in the near future.

India will be benefiting from lower crude oil prices as it lowers import bill and also helps in bringing inflation lower.

The October CPI inflation came in at 5.52 per cent vs 6.46 per cent and the WPI inflation eased to 1.77 per cent vs 2.38 per cent in September.

There are reports that Finance Minister Arun Jaitley is expected to meet RBI Governor Raghuram Rajan to push for interest rate cut at the earliest.

At 09:40 a.m.; the Bank Nifty was at 18,378.80, up 1.98 per cent. It surged over 2 per cent intraday to hit all-time high of 18,403.80.

Bank of India (up 4.22 per cent), PNB (up 3.85 per cent), Bank of Baroda (up 3.72 per cent), Canara Bank (3.64 per cent) and Kotak Bank (up 2.28 per cent) were the top Nifty gainers.