Mumbai, June 3 : The Nifty Bank index touched a record high of 56,161.40 on Tuesday ahead of the crucial RBI MPC meeting.

The surge was driven by strong buying in select banks as investors showed optimism ahead of a possible interest rate cut by the Reserve Bank of India (RBI) later this week.

However, the early gains didn't last. By mid-morning, the index had slipped slightly, down 0.1 per cent as some investors booked profits and heavyweight banks showed weakness.

Major lenders like ICICI Bank, Axis Bank, and Kotak Mahindra Bank dragged the index lower, falling up to 0.9 per cent.

In contrast, smaller banks like AU Small Finance Bank, Federal Bank, Punjab National Bank, HDFC Bank, and IndusInd Bank saw gains between 0.4 per cent and 1.2 per cent.

Despite the pullback, the Nifty Bank index is still one of the top-performing indices in 2025. It has gained 10 per cent since the start of the year and is up 15 per cent from its 52-week low.

Over the past 12 months, it has delivered a return of 9.7 per cent. The market is now focused on the RBI's upcoming policy decision on June 6.

Many analysts expect the central bank to cut the key lending rate, or repo rate, by another 25 basis points.

Under Governor Sanjay Malhotra, the RBI has already cut rates twice this year, reducing the repo rate from 6.5 per cent to 6 per cent. Experts believe the conditions are right for further easing.

Adding to market optimism, India's economy grew by 7.4 per cent in the March quarter (Q4) of FY25, the strongest growth of the year.

The overall GDP growth for FY25 stood at 6.5 per cent, confirming India's position as the fastest-growing major economy in the world.

Meanwhile, both the Indian equity indices -- Sensex and Nifty -- opened a tad lower on Tuesday as heavyweights like L&T and Bajaj Finance were trading in the red.

/IANS