Bank Nifty Today: After RBI cut, Bank Nifty jumped tremendously

News Topical, Digital Desk : Bank Nifty Today: After the decisions taken in the monetary policy meeting of the Reserve Bank of India (RBI), the domestic stock market saw a strong jump.

After the 50 basis point repo rate cut by RBI, the Nifty Bank index touched a new record high of 56,305. This index has recovered 800 points from its recent low.

Buying in realty and auto stocks
The sectors which are rate-sensitive got the most benefit from the reduction in interest rates. Stocks of realty and auto sector saw a gain of more than 4%. In

the realty sector: Stocks like DLF, Prestige Estates Projects, Sobha, Godrej Properties and Oberoi Realty led the rise.

In the auto sector: Out of the 15-stock auto index, 13 stocks were in the green mark, while only two were in the red mark.

Enthusiasm in banking stocks too: The banking sector also saw a rise. Stocks like BoB, IDFC First Bank, PNB, Axis Bank remained strong and the banking index registered a gain of 1%.

CRR also cut by 100 basis points RBI has reduced the repo rate to 5.5%, which is the third straight cut after two cuts done in February and April. Along with this, the central bank has also reduced the Cash Reserve Ratio (CRR) by 100 basis points, which will bring ₹2.5 lakh crore liquidity into the system. This will reduce the funding cost for banks. RBI Governor Sanjay Malhotra said in his address that this step will increase the flow of cash in the economy and borrowing will become cheaper. SDF and MSF rates have also been reduced by 50 basis points, so that the impact of monetary policy gets strengthened. Repo rate is the interest rate at which RBI lends short term funds to banks.