Bank scrips rise on rate cuts
New Delhi: Bank scrips rose across-the-board on the back of the Reserve Bank of India move to cut interest rates, which would result in valuation gains for their investment portfolios.
Most Indian banks hold a substantial part of their assets in the form of government securities. A lower bank rate cut leads to a decline in yields on fixed income instruments, while the value of these securities rises because they carry a higher coupon at the older rate.

The country's largest bank, State Bank of India rose as much as 3.5 per cent, Corporation Bank as much as 4.4 per cent and HDFC Bank surged 4.8 per cent in anticipation of softer rates.

This, and boosted by technology stocks, the benchmark BSE Sensex was up 29.54 points at 3,046.38 at 12.03 pm on Monday. The NSE-50 index also edged up 11.7 points at 988.35.
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