Noida, Aug 4 (APAC Media): Banking shares traded under pressure on Tuesday as investors stayed cautious ahead of the Reserve Bank of India’s (RBI) policy decision, with concerns over rising inflation, global geopolitical risks and uncertainty surrounding the central bank’s future interest rate stance dampening market sentiment.
The Nifty Bank index declined nearly 1.1% during intraday trade to touch a low of 57,657.15, dragged by selling across several private sector lenders. Investors are closely tracking the RBI’s policy commentary, particularly for signals on its stance toward inflation and interest rates.
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Market participants largely expect the Monetary Policy Committee (MPC) to keep the repo rate unchanged.
However, attention is focused on whether the central bank will maintain a cautious stance amid inflationary pressures that have moved above its comfort zone.
Federal Bank emerged as the biggest loser among banking stocks, declining more than 4% during the session. Axis Bank fell over 1.5%, while AU Small Finance Bank, HDFC Bank, State Bank of India (SBI), ICICI Bank and IndusInd Bank declined between 0.7% and 1.5%.
In contrast, public sector lenders, including Canara Bank, Bank of Baroda and Punjab National Bank, traded with gains, outperforming the broader banking index.
The RBI is scheduled to announce its monetary policy decision on August 5 at 10 am. This will be followed by Governor Sanjay Malhotra’s press conference at noon, where investors will look for further clarity on the central bank’s outlook on inflation and economic growth.
The latest policy meeting comes amid rising price pressures and global uncertainties. Retail inflation increased to 4.68% in June, moving above the RBI’s medium-term target of 5%.
The latest inflation trends have increased uncertainty over the possibility of further interest rate cuts in the coming months.
At its previous monetary policy meeting in June, the Monetary Policy Committee (MPC) kept the repo rate unchanged at 5.25%, in line with market expectations. Although economic conditions have supported a pause in the rate cycle, analysts expect the RBI to maintain a cautious stance and avoid sending a strong dovish signal amid ongoing inflation risks.
Meanwhile, in the technology sector, artificial intelligence startup Anthropic announced an expansion of its India operations. The company said its Claude AI models will be available through in-country inference on Amazon Bedrock, allowing customer data processing to take place on servers located within India.
The move is expected to support organisations that require data localisation and stronger regulatory compliance when deploying artificial intelligence solutions. Industries handling sensitive information are likely to benefit from the availability of local AI infrastructure.
–ENDS–
Disclaimer:Â This article is for informational purposes only. APAC Media is not liable for any investment decisions or losses. Please conduct your own research or consult a financial advisor before investing.
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