Nifty Bank Breaks RBI Policy Day Low, Dragged by HDFC Bank and Axis Bank

The Nifty Bank Index is a benchmark that tracks the performance of the most liquid and large Indian banking stocks. Comprising a maximum of 12 banks listed on the National Stock Exchange (NSE), it serves as a key indicator for investors and market intermediaries to assess the capital market performance of Indian banks.

Nifty Bank Performance on February 10, 2025

On February 10, 2025, the Nifty Bank Index opened lower at 50,052 and continued to decline through the trading session. It slipped below the critical 50,000 mark, touching an intraday low of 48,703.10. As of 2:38 PM, the index recovered from its lows but remained under the 50,000 level, down by 0.50%.

Key Contributors to the Decline

Most of the banking stocks within the index were trading in the red, except for Kotak Mahindra Bank and ICICI Bank, which provided some support. However, HDFC Bank and Axis Bank emerged as the biggest draggers, pulling the index lower. Despite the slight recovery, selling pressure continued to weigh on the banking sector.

RBI’s First Rate Cut in 5 Years

The Reserve Bank of India (RBI) recently reduced the repo rate by 25 basis points (bps) to 6.25%, marking the first rate cut in five years. Alongside this decision, the Standing Deposit Facility (SDF) rate was lowered to 6%, and the Marginal Standing Facility (MSF) rate was adjusted to 6.5%. While the move aimed to stimulate economic growth, the central bank maintained a neutral policy stance.

Despite the cut, the Nifty Bank Index slipped below the lower levels recorded during the RBI’s first-rate reduction.

Year-to-Date Performance of Nifty Bank

Since the beginning of CY 2025, the Nifty Bank Index has declined by 1.84%. However, on February 10, 2025, it exhibited relative resilience compared to the broader Nifty50 index, which saw a steeper decline.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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