Canara Bank, HDFC Bank to SBI: Bank shares earn up to 2% on the hope that RBI rate cuts to inflation data | Einsmark news

Share Market Today: Indian bank shares opened higher in Wednesday’s trade session, April 16, which extended their finish line to the third consecutive day, after the retail inflation of India was to a low year low. This increased the investor sentiment over the expectations of another rate reduction by the Reserve Bank of India (RBI), which cut the Benchmark Repo rate to 6% of 6.5%, with two consecutive cuts of 25 basis points in recent monetary policy meetings. Against this background, the Nifty Bank index rose 0.70% to touch a high of 52,749 points. Among individual shares, Federal Bank, Bank of Baroda, Canara Bank and the Punjab National Bank rose to 2%. Large cap bank shares such as Kotak Mahindra Bank, Axis Bank, Indusind Bank and State Bank of India also achieved more than 0.5% during the session. Analysts are now projecting a collection in credit growth within the financial system, powered by back-to-back RBI rate cuts and the increase in the exemption limit of income tax to £ 12 lakh in the Union budget 2025-26. Inland rating agency Crisil estimated on Tuesday that bank credit growth will accelerate to 13% in FY26 of 11% in FY25. This growth is expected to be supported by recent regulatory measures, a boost for consumption of tax cuts and a softer interest rate environment. However, the agency warned that the growth of the deposit ” guard ‘. It has also been noted that ongoing global tariff wars can make companies more careful about loans. Retail credit, which accounts for nearly a third of the total loans in the system, is expected to grow 13-14% in FY26, higher than 12%. It will be supported by improved affordability in a lower interest rate regime, especially in the mortgage loan segment, according to a report by the Economic Times. Meanwhile, the global brokerage firm Goldman Sachs has retained its ‘Buy’ rating on HDFC Bank, with a target price of £ 2,087 each, after the bank’s decision to lower its interest rates. HDFC Bank has lowered the rate by 25 basis points to 2.75% for balances below £ 50 lakh – which marks the first such cut since June 2020. According to Goldman Sachs, this move reflects the bank’s confidence in continued deposit attack, even at lower rates. In addition, the saving rate cut is expected to help facilitate the pressure of the margin as the economy enters into a potential rate-cutting cycle. India’s retail inflation strikes a perennial low retail inflation, which was released on Tuesday, based on the Consumer Price Index (CPI), amounted to 3.34% annually, lower than the 3.61% registered in February and reported 4.85% in the previous period, according to the Ministry of Statistics and Program. After reporting a 6.4% growth during the December term, the slowest since Q4FY23, which impedes a quarter, economists now expect the central bank to choose a rate reduction in June. Economists notice that retail inflation was alleviated in March 2025 until the lowest since August 2019, driven by a continuing seasonal correction in food prices, although the decline remained uneven, as fuel and light and core inflation emerged during the same period. The latest retail inflation data also supports the shift from the central bank to an accommodating attitude and its decision to lower rates in April, with the expectations of further relief in June. Disclaimer: The views and recommendations given in this article are those of individual analysts. This does not represent the views of coin. We advise investors to check with certified experts before making investment decisions. First published: 16 Apr 2025, 10:28 am Ist