Shares of HDFC Bank hit the fast lane today after reports that the lender hiked its marginal cost of funds based lending rate (MCLR) by 10 basis points across tenures.
The scrip was up 0.42 per cent at Rs 2,067.75 at around 9.20 am whereas the Sensex surged 220 points, or 0.63 per cent, to 35,398.94.
The decision to hike MCLR followed the Reserve Bank of India's decision to raise the key lending rate by 25 basis points.
HDFC Bank had scaled its fresh 52-week high of Rs 2,170.05 on June 4 this year and 52-week low of Rs 1,631 on June 7, 2017.
In the second bi-monthly policy review for this fiscal, the RBI hiked the key interest rate — for the first time in four-and-a-half-years — by 25 basis points to 6.25 per cent.
The Reserve Bank is likely to go for more rate hikes on risks from factors like the minimum support prices for farm produce and firm global commodity prices, HDFC Bank said on Wednesday.
"This is not likely to be end of the hike cycle as domestic price risks such as MSP hikes and firm global commodity prices would warrant further monetary action," the bank said in a post on Twitter.
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