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Riya Dwivedi made post

Why were SBI and BOB so sharply down on 06 December with correction of over 5% in both the stocks?

Answer
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8 months ago


The correction was largely on account of the disappointment on the rate cuts by the RBI. Both banks had rallied on hopes that the RBI would cut rates by 25 bps. However, the RBI chose to hold repo rates at the level of 5.15%. Lower yields would have enabled both these banks to gain some benefit on their bond portfolios. Also, lower yields were supposed to give a boost to their lending portfolios. With the RBI holding rates, the stock markets were disappointed and the impact was felt most in the PSU banking stocks.