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Bank shares firm up ahead of RBI meet 17-Sep-2012

Canara Bank (up 5.11%), Yes Bank (up 4.93%), Union Bank of India (up 4.46%), IDBI Bank (up 3.88%), Bank of Baroda (up 3.84%), Axis Bank (up 3.72%), ICICI Bank (up 3.54%), State Bank of India (up 3.37%), Bank of India (up 3.19%), Punjab National Bank (up 2.85%), IndusInd Bank (up 2.5%), Kotak Mahindra Bank (up 2.33%), Federal Bank (up 2.2%) and HDFC Bank (up 0.16%), edged higher.

The BSE Bankex was up 2.58% at 12,503.07. It outperformed the Sensex, which was up 0.64% at 18,581.52.

The BSE Bankex had underperformed the market over the past one month till 14 September 2012, rising 1.01% compared with the Sensex's 4.15% rise. The index had also underperformed the market in past one quarter, rising 7.50% as against Sensex's 10.71% rise.

The Reserve Bank of India (RBI) is scheduled to undertake a mid-quarter review of the monetary policy today, 17 September 2012. The RBI is expected to maintain status quo on short term lending rates, as per the poll of economists carried out by Capital Market.

RBI last cut rates by 0.5% point to 8% from 8.5% in April 2012, its first move to reverse a 20-month rate-tightening cycle. It then held rates steady in June and at its last rate-setting meeting on 31 July, saying that a cut would exacerbate inflationary pressures.

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