Mkts lap up RBI rate cut; Sensex jumps 728 pts to above 28,000
Mumbai: Stock markets cheered the RBI’s surprise move to cut repo rate with the benchmark Sensex today surging 728.73 points in its biggest single-day gain since May 2009 to end at 28,075.55 on the back of all-round buying.
The NSE Nifty soared 216.60 points to close at 8,494.15.
Investor wealth reclaimed the Rs 100-lakh crore mark led by gains in shares of realty, banking, capital goods, power, auto and oil & gas. Over 1,700 stocks listed on the BSE rose.
Besides, a strengthening rupee which was trading over one per cent higher at 61.35 against the dollar (intra-day) also buoyed the trading sentiments.
Prominent gainers among the 30 Sensex stocks include HDFC, SBI, ICICI Bank, L&T, Tata Power, RIL, M&M, Maruti Suzuki, ITC Ltd, Axis Bank, HDFC Bank and Tata Motors. Among Sensex components, 28 stocks gained, while Hindalco and Hindustan Unilever declined.
Today’s Sensex gain of 728.73 point is the biggest daily rise since May 4, 2009 when it had jumped by 731.50 points.
The Reserve Bank of India today surprised markets with a 25 basis points cut in repo rates to 7.75 per cent with a view to boost economic growth.
“This rate cut…can be taken by the markets as a signal to a rate lowering cycle. This also signals a certain confidence that the RBI is showing in longer term trends on fiscal front and a leading signal of a victory over the inflation dragon,” said Tushar Pradhan, Chief Investment Officer, HSBC Global Asset Management India.
Buying activity gathered momentum as funds and investors were seen creating positions on hopes of further market friendly measures and hopes of encouraging quarterly earnings by blue-chip companies, brokers said.
A firming trend at other Asian bourses following rebound in commodity prices including oil and copper after yesterday’s plunge and a higher opening in European markets were other factors behind today’s rally, they said.
Sectoriwse, the BSE Realty index gained the most by surging 7.99 per cent, followed by Banking index by 3.29 per cent, Capital Goods index by 2.40 per cent, Auto index by 2.13 per cent, Power index rose by 2.10 per cent and Oil & Gas index 2.01 per cent. In line with overall trends, Smallcap index rose 1.01 percent and Mid-cap index was up 1.2 per cent.
Meanwhile, foreign portfolio investors sold shares worth a net Rs 69.74 crore yesterday as per provisional data.