Mumbai: The BSE Sensex rallied more than 200 points on Tuesday, reacting to the surprised repo rate cut of 50 basis points by the RBI and positive European markets ahead of Spain auction treasury bills. The rally was majorly led by metals, PSUs, capital goods, FMCG, telecom and power stocks, but not wholly by banks.
However, oil & gas producers Reliance Industries and Cairn India stayed under pressure ahead of their quarterly numbers this week.
The BSE benchmark climbed 206.99 points or 1.21 per cent, to close at 17,357.94 led by 27 components. Meanwhile, the NSE benchmark touched an intraday high of 5298.20, before closing up 63.50 points at 5,289.70.
The Sensex shot up over 200 points immediately after the Reserve Bank of India cut repo rate by 50 basis points to 8 per cent, but the warning of limited scope for further cut in policy rates due to persistent upside risks to inflation wiped out gains completely at one point of time during the day. However, the market gained momentum again in the second half of trade due to strong European markets.
France's CAC and Germany's DAX jumped over 1 per cent ahead of much awaited Spain's auction of treasury bills. Britain's FTSE gained 0.8 per cent and the Dow Jones futures rose 46 points.
At 14:55 hours IST: Sensex gains 200 pts; RComm, Rel Infra, Rel Cap surge 5-6 per cent
The BSE Sensex gained momentum again, rising more than 200 points following further upmove in European markets. France's CAC and Germany's DAX rallied over 1 per cent while the Britain's FTSE went up 0.8 per cent ahead of a closely-watched Spain's auction of treasury bills.
The BSE benchmark surged 207 points or 1.2 per cent to 17,358.02, supported by 27 components. Meanwhile, the NSE benchmark gained 64.45 points at 5,290.65. The Indian rupee appreciated by 18 paise to 51.49 a dollar.
The Reserve Bank of India surprised the street with a repo rate cut by 50 basis points to 8 per cent, but raised concerns over the persistent upside risks to inflation that could limit the scope for further cut in policy rates.
In a bankers' meet, chiefs of major banks said both deposit and lending rates would come down in near term. Pratip Chaudhari, chairman of the top lender State Bank of India said the RBI rate cut will be passed on by banks and there would be comprehensive cut in SBI's rates.
State-owned oil & gas producer ONGC and largest coal mining company Coal India shot up over 3 per cent.
Engineering and construction major Larsen & Toubro and India's No. 1 software services exporter Tata Consultancy Services gained 1.9 per cent each.
Top lenders State Bank of India and ICICI Bank went up 1.6 per cent and 1.4 per cent, respectively. Housing finance company HDFC was up 1 per cent.
Shares of Anil Dhirubhai Ambani Group companies like Reliance Capital, Reliance Communications and Reliance Infrastructure surged 5-6 per cent. Top telecom operator Bharti Airtel jumped 1.7 per cent.
At 13:52 hours IST: Volatile Sensex stays higher; European markets rebound
The BSE Sensex was trading higher with 0.4 per cent gains led by banks, technology, infrastructure and mining stocks. Even European markets, which opened lower, gained 0.5-0.8 per cent. However, the fall in India's most valued stock Reliance Industries (down 0.55 per cent) has limited somewhat upside.
The BSE benchmark rose 78 points to 17,228.76 and the NSE benchmark gained 22 points at 5,248.40 while the broader markets were flat.
Gains after the surprise cut of 50 basis points in repo rate to 8 per cent by the RBI trimmed immediately post the central bank warned by saying the scope for further rate cut is limited as upside risks to inflation persist.
Yadnesh Chavan- Fund Manager, Fixed Income, Mirae Asset Global Investments (I) Pvt. Ltd said, "on Tuesday's rate cut of 50 bps is the first reduction in policy rates since 2009. The bigger than expected rate cut clearly indicates a shift in policy stance towards boosting growth in a flagging economy. However, at the same time the apex bank has raised concerns over the persistent upside risks to inflation which could limit the scope for further reduction in policy rates."
Coupon rate for 8.79 per cent 2021 bond increased by 0.63 per cent to 102.8 and 8.79 per cent 2021 bond yield went down by 1.15 per cent to 8.3574.
State Bank of India, country's largest lender climbed 1 per cent while its rival ICICI Bank was up just 0.4 per cent. HDFC Bank was flat.
Auto sector, one of the rate sensitives, was under pressure. Shares of M&M, Tata Motors and Maruti were down 0.2-1 per cent while two-wheeler majors Bajaj Auto and Hero Motocorp gained 1 per cent each.
State-owned ONGC and coal mining company Coal India rallied 2.5-3 per cent.
At 12:44 hours IST: Sensex sheds gains; Coal India, ONGC top buy list
The BSE Sensex erased gains in afternoon trade, weighed down by banks, capital goods and auto stocks. Index heavyweights Reliance Industries and Infosys extended fall to 0.7 per cent.
Markets disappointed on RBI's comment saying limited headroom for further rate cut, says Vikas Khemani of Edelweiss. The market had rallied more than 200 points on the Sensex immediately after the Reserve Bank of India announced a cut of repo rate by 50 basis points to 8 per cent, but the rally could not last long.
The BSE benchmark was up just 3.55 points at 17,154.50 while the NSE Nifty fell 1.6 points to 5,224.60.
Private sector lenders ICICI Bank and Axis Bank declined 0.8 per cent each while rivals State Bank of India and HDFC Bank were down 0.4 per cent each.
Capital goods majors Larsen & Toubro and BHEL were moderately lower. Tata Motors (top commercial vehicle maker), M&M (largest utility vehicle maker) and Maruti (top car maker) lost 1 per cent each.
However, shares of state-owned ONGC and Coal India gained 2 per cent and 2.6 per cent, respectively.
ITC, TCS, HDFC, NTPC, Hero Motocorp, Sun Pharma, Bharti Airtel and Cipla moved up 0.4-1 per cent.
Even the market breadth turned negative; declining shares outnumbered advancing by 695 to 670 on the National Stock Exchange.
At 11:54 hours IST: Sensex off day's high; Infosys, Reliance underperform
The BSE Sensex shed some gains as although the Reserve Bank of India surprised the street by cutting repo rate by 50 basis points to 8 per cent in its annual monetary policy for FY13, but said there would be limited room for further cuts. Even the fall in index heavyweights Reliance Industries and Infosys has limited the somewhat upside - both stocks fell 0.4 per cent each.
The BSE benchmark moved up 128 points or 0.75 per cent to 17,279.01, supported by 26 components. Meanwhile, the NSE benchmark rose 37.40 points to 5,263.60.
The banking regulator has cut marginal standing facility (MSF) by 50 bps and raised MSF borrowing cap to 2 per cent versus 1 per cent earlier, which will provide comfort on liquidity, says the RBI. Central bank forecasts WPI inflation for FY13 at 6.5 per cent. It said the upside risks to inflation persist and insisted a need of hike in petrol prices.
Top lenders ICICI Bank and State Bank of India climbed 1.2 per cent and 1.4 per cent, respectively.
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Cigarette major ITC rose 0.9 per cent and FMCG company HUL was up 0.5 per cent. State-owned oil & gas producer ONGC moved up nearly 3 per cent.
Shares of Coal India topped the buying list, rising 3 per cent after the lower than expected penalty (of 0.01 per cent of value on shortfall in coal supply to power producers) set by the board members.
India's largest software services provider TCS and telecom operator Bharti Airtel gained 1 per cent each.
Manappuram Finance tanked nearly 6 per cent and Muthoot Finance lost 2 per cent after the RBI cuts banks' exposure to gold loan NBFCs to 7.5 per cent as against 10 per cent earlier.
At 11:03 hours IST: Sensex jumps 200 pts as RBI cuts repo rate by 50 bps
The BSE Sensex and NSE Nifty surged over 1 per cent post the banking regulator Reserve Bank of India cut repo rate by 50 basis points to 8 per cent, which was higher than market expectations. The street had expected 25 basis points cut in repo rate.
The BSE benchmark was up 206 points at 17,357 led by 29 components. Meanwhile, the NSE benchmark was up 63 points at 5,289.
Country's largest lenders State Bank of India and ICICI Bank rallied 3 per cent and 2 per cent, respectively while rival HDFC Bank was up just 0.6 per cent.
State-owned oil & gas producer ONGC shot up nearly 3 per cent while Reliance Industries gained 0.35 per cent.
Engineering and construction major Larsen & Toubro jumped 1.5 per cent and state-owned BHEL rose 1 per cent.
However, only Infosys, software services provider continued to underperform, falling 0.26 per cent.
The market breadth turned strong; about 1370 shares advanced while 820 shares declined on the BSE.
At 10:17 hours IST: Sensex choppy, awaits RBI monetary policy; Coal India up 2 per cent
The BSE Sensex stayed flat as it is waiting for the outcome of the Reserve Bank of India (RBI) to get direction on either side. Experts believe the RBI may cut repo rate, but the banks may not pass on the same to customers.
Robert Prior-Wandesforde of Credit Suisse expects the RBI to cut rates on Tuesday, mainly because the decline in core inflation has given the RBI more headroom. However, he does not expect banks to cut lending rates significantly. "Interest rates are high, they are restrictive, so they will continue to cap growth,” he explained.
The BSE benchmark slipped just 3.27 points to 17,147.68 and the NSE benchmark was down 3.65 points at 5,222.55.
Private sector lenders ICICI Bank and HDFC Bank dropped nearly 1 per cent while the top lender State Bank of India was down just 0.15 per cent.
Index heavyweights Reliance Industries, Larsen & Toubro and Infosys declined 0.5 per cent each while BHEL gained 0.35 per cent.
Even traders were booking profits in other rate sensitives - Tata Motors, M&M and Maurti were moderately down.
However, Tata Consultancy Services, country's largest software services provider and state-owned oil & gas producer ONGC rallied 1 per cent each.
Largest coal mining company Coal India continued to trade higher with more than 2 per cent gains after the board members agreed to ink fuel supply agreements (FSAs) with power producers and to pay penalty of 0.01 per cent of value on shortfall in supply, which was lower than expectations.
Metals stocks like Sterlite, Jindal Steel, Tata Steel and Hindalco moved up 0.2-1.2 per cent.
Advancing shares outnumbered declining by 639 to 512 on the National Stock Exchange.
At 9:20 hours IST: Sensex flat ahead of RBI credit policy; banks down
The BSE Sensex and NSE Nifty opened flat ahead of the RBI's annual monetary policy for FY13 on Tuesday. Traders booked profits in banks stocks ahead of policy while index heavyweights Reliance Industries and Infosys continued to fall, losing 0.6 per cent and 0.3 per cent, respectively.
The BSE benchmark was up just 2.55 points at 17,153.50 while the NSE benchmark was flat at 5,226.
Sajjid Chinoy of JPMorgan feels the RBI appears poised to begin its rate easing cycle with a 25 bps cut in the repo rate on Tuesday. However, strong pipeline inflation pressures are likely to cause a re-acceleration once the favourable base effects fade away, he says.
Among frontliners, Coal India up 2.6 per cent after CNBC-TV18 reported quoting sources that the board members approved inking of fuel supply agreements (FSAs) with buyers and said the company would pay penalty of 0.01 per cent of value on shortfall in supply.
BHEL, TCS, Infosys, Tata Steel, Sesa Goa, Sterlite Industries, Reliance Communications and Tata Motors were trading higher in early trade.
However, Ambuja Cements, HDFC, HDFC Bank, Kotak Mahindra Bank, SBI, Axis Bank, PNB, ICICI Bank, Cairn, BPCL, L&T, Reliance Industries and HUL were under pressure.
In the second line shares, Kingfisher Airlines rose 2.5 per cent post the company cleared second instalment of I-T dues. Instalment of Rs 9 crore due on April 14 paid yesterday.
MindTree shot up 5 per cent post better than expected numbers in Q4. Its PAT rose 13.8 per cent QoQ to Rs 68.9 crore while estimate was at Rs 58 crore.
Hotel Leela was up 4 per cent after The Economic Times reported that the company's promoters will invest Rs 150 crore through preferential allotment under CDR deal.
Aurobindo Pharma and Tata Motors DVR were up 1.5 per cent.
Sundaram Fasteners and Viceroy Hotels gained 5 per cent.
Golden Tobacco moved up 5 per cent; The Economic Times reported that SEBI directed acquirers Pranidhi holdings and Pramod Jain to make open offer for the company.
However, IVRCL continued to trade lower since Essel Group said it was not interested in buying more shares of the company. The stock fell 1.5 per cent.
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