Private Bank Stocks Jump Up to 4% as Kotak and Axis Lead Gains Ahead of RBI Policy Decision
Published: 2026-10-06 12:10 IST | Category: Markets | By Flash Finance desk (written with AI assistance) · Editor: Kokila
Shares of private sector banks witnessed strong buying interest during Tuesday's intraday trading session, rallying up to 4% just a day ahead of the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) outcome. The gains lifted the sectoral indices, outperforming the benchmark equity gauges.
The Nifty Private Bank index climbed over 1% to touch the 27,000 mark, while the broader Bank Nifty gained 0.6% and the Nifty PSU Bank index added 0.3%. In comparison, benchmark indices BSE Sensex and NSE Nifty rose 0.4% each.
Top Movers Among Banking Stocks:
- Kotak Mahindra Bank: Led the rally among private lenders, advancing 4% during intraday trade.
- Axis Bank: Gained more than 1% as buying momentum extended across large-cap private counters.
- IndusInd Bank & Bandhan Bank: Both added over 1% each during the session.
- HDFC Bank: Advanced 0.5% in Tuesday's trade.
The two-day MPC meeting commenced on Monday, October 5, and the rate-setting panel is scheduled to announce its decision on Wednesday, October 7. The central bank's deliberations come amid elevated bond yields, persistent global crude oil pressures, and geopolitical friction that have added upward risks to inflation.
Analysts suggest that financial markets have increasingly factored in tightening measures. Murthy Nagarajan, Head of Fixed Income at Tata Asset Management, noted that the domestic bond market has been pricing in a repo rate hike of 25 basis points alongside a potential temporary cash reserve ratio (CRR) increase of 50 basis points. He added that the bond market has already absorbed nearly 100 basis points of rate increases across the cycle, with domestic debt yields expected to stabilize in the 7.15% to 7.25% range if policy commentary remains measured.
From an equity investor perspective, banking stocks often demonstrate resilience during tightening cycles. Analysts point out that when policy rates adjust upward, floating-rate loan books reprice more quickly than term deposit portfolios, lending temporary margin support and profitability buffers to private lenders with robust liability franchises.
Tags: Reserve Bank of India Kotak Mahindra Bank Axis Bank Nifty Private Bank Bank Nifty Monetary Policy Committee
