The stocks of Canara Bank, HDFC Bank and SBI rose up to 2% on April 16 as easing retail inflation made investors expect further rate cuts by the Reserve Bank of India (RBI). India’s consumer price index dropped to 3.34% in March, the lowest since August 2019, which strengthened the expectations that the RBI may continue easing rates after reducing the benchmark repo rate from 6.5% to 6% in the last two cuts.
The Nifty Bank index rose 0.70%, reaching an intraday high of 52,749 points. Mid-cap banks like Federal Bank, Punjab National Bank, Bank of Baroda and Canara Bank led the rally with gains of up to 2% while large-cap names like HDFC Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank and SBI climbed over 0.5%.
Global brokerage Goldman Sachs maintained its ‘buy’ rating on HDFC Bank with a target of ₹2,087 after the bank cut savings deposit rates by 25 basis points. Analysts say this signals confidence in deposit flows and helps cushion margins as rate cuts loom.
Crisil forecasts FY26 credit growth to hit 13%, up from 11% in FY25, driven by the RBI’s policy, tax incentives, and a stable interest rate environment.
