Market cheers RBI policy; Sensex surges 362 points

Mumbai — The market bounced back yesterday after the central bank kept interest rates unchanged. Financial stocks ended with smart gains after the RBI left repo and reverse repo rates unchanged.

By Our Correspondent

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Published: Wed 30 Apr 2008, 9:40 AM

Last updated: Sun 5 Apr 2015, 11:47 AM

The central bank, however, hiked Cash reserve ratio (CRR) by 25 basis points. Rate sensitive banking, auto and realty stocks surged. Technology stocks, too, rallied smartly after the Finance minister extended tax holiday for STPI by a year to March 2010. Metal stocks rallied. The market had witnessed a bout of volatility earlier in the day ahead of monetary policy announcement. The market breadth was strong. Asian and European markets were mixed.

The CRR is the percentage of banks’ deposits which they must keep as cash with the central bank. It may be recalled that RBI had earlier this month announced a two-stage rise in CRR to 8 per cent. The Reserve Bank of India (RBI) said managing liquidity would continue to receive priority in its policy objectives and warned it would act swiftly to curb any signs of adverse developments in inflation expectations. RBI has forecast economic growth of 8 per cent to 8.5 per cent in the fiscal year that began this month, after an estimated 8.7 per cent growth in 2007/08. RBI said it aims for inflation of around 5.5 per cent this fiscal year with the goal of lowering it close to 5 per cent as soon as possible.

The 30-share BSE SEnsitive Index (Sensex) opened 35 points higher at 17,051. Nervousness in morning trades saw the index slip marginally into red to a low of 17,012. However, positive announcements — RBI leaving repo rates unchanged and FM extending tax holidays on STPI — triggered aggressive buying in financial and technology stocks. The Sensex rallied to a high of 17,425, and finally ended with a gain of 362 points at 17,378.

The NSE Nifty surged 105 points to end at 5,195. Nifty May 2008 futures were at 5217.40, a premium of 21.90 points as compared to spot closing of 5,195.50.

The overall turnover on BSE soared to Rs72.90 billion from Rs55.44 billion on Monday. Turnover in NSE’s futures & options segment spurted to Rs418.19 billion from Rs254.59 billion on Monday.

The market breadth was positive - out of 2,770 stocks traded, 1,588 advanced, 1,121 declined and 61 are unchanged. In the 30-member list of sensitive stocks, 26 were up while 4 were down. In the finance and banking sector, HDFC soared 6 per cent to Rs2,881. SBI rallied 3.3 per cent to Rs1,794, and HDFC Bank added 2 per cent to Rs1,548. In the IT sector, Satyam zoomed over 8 per cent to Rs479. Infosys surged over 5 per cent to Rs1,751. Wipro gained 4.7 per cent at Rs479, and TCS advanced over 3 per cent to Rs911.

DLF surged 8.5 per cent to Rs726. Hindalco gained 6.5 per cent at Rs198, and Jaiprakash Associates added 6 per cent to Rs266. Tata Steel rallied 4 per cent to Rs809. Reliance Inds moved up 2.3 per cent to Rs2,653, and Larsen & Toubro advanced 2 per cent to Rs3,007. Hindustan Unilever gained 1.5 per cent at Rs251. Ambuja Cements, BHEL and Ranbaxy were up 1.3 per cent each at Rs115, Rs1,892 and Rs485, respectively. Grasim plunged over 6 per cent to Rs2,472.

On the losers side, some consolidation was seen after on Monday’s gains. Like, Bharti Airtel shed 2.8 per cent at Rs902, and Reliance Communications slipped 1.7 per cent to Rs575.

Reliance Capital topped the value chart with a turnover of Rs3.17 billion followed by Sesa Goa (Rs3.10 billion), Reliance Petroleum (Rs2.95 billion), Reliance Natural Resources (Rs2.70 billion) and Reliance Inds (Rs2.32 billion).

Reliance Natural Resources led the volume chart with trades of around 21.5 million shares followed by Ispat Industries (17.1 million shares), IFCI (15.5 million), Indiabulls Securities (15.1 million) and Reliance Petroleum (14.8 million).

The BSE Mid-Cap index rose 1.17 per cent to 7146.95 and BSE Small-Cap index rose 0.77 per cent to 8,785.31.

BSE Realty index (up 5.9 per cent to 8,650.24), BSE Metal index (up 3.64 per cent to 16192.97), BSE IT index (up 5.24 per cent to 4237.81) and BSE Consumer Durables index (up 2.81 per cent to 4585.97) outperformed Sensex.

BSE Oil & Gas index (up 2.02 per cent to 11661.26), BSE Bankex (up 1.68 per cent to 8,964.75), BSE PSU index (up 1.65 per cent to 8008.99), BSE Auto index (up 1.52 per cent to 4,646.62), BSE Capital Goods index (up 1.28 per cent to 13931.17), BSE HealthCare index (up 0.78 per cent to 4,248.62), BSE Power index (up 0.96 per cent to 3,336.34) and BSE FMCG index (up 0.52 per cent to 2,412.61) underperformed Sensex.

Realty stocks surged in late trade. Indiabulls Real Estate (up 3.06 per cent to Rs557.35), DLF (up 8.57 per cent to Rs725.85) and Unitech (up 8.18 per cent to Rs317.50) rose.

IT stocks surged. Satyam Computer Services (up 8.22 per cent to Rs479.35), Infosys (up 5.15 per cent to Rs1,750.75), Wipro (up 4.7 per cent to Rs479.20) and Tata Consultancy Services (up 3.15 per cent to Rs910.80) edged higher.

Metal stocks rose. Tata Steel (up 4.01 per cent to Rs808.90), National Aluminium Company (up 4.37 per cent to Rs458.70), Hindalco Industries (up 6.44 per cent to Rs198.20), Steel Authority of India (up 2.08 per cent to Rs179.40) and Sterlite Industries (up 4.77 per cent to Rs898.85) edged higher.

Finance Minister P Chidambaram yesterday said government will impose export tax on basmati rice and some steel products, and cut import duties on key inputs like ferro alloys and metallurgical coke. He said the measures were being taken to improve domestic supplies and to moderate prices.

Banking stocks surged after the RBI’s policy announcement. State Bank of India (up 3.27 per cent to Rs1,793.50), HDFC Bank (up 1.95 per cent to Rs1,547.50) and ICICI Bank (up 0.71 per cent to Rs901.30) edged higher.

Auto Stocks edged higher. Mahindra & Mahindra (up 1.17 per cent to Rs642.70), Tata Motors (up 1 per cent to Rs639.95) Maruti Suzuki India (up 1.24 per cent to Rs731.30) and Hero Honda Motors (up 5.34 per cent to Rs861.85) made gains.

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