Tuesday, July 27, 2010

Sensex rebounds by 57pts as RBI policy matches expectations

MUMBAI: The Bombay Stock Exchange benchmark Sensex on Tuesday rose by over 57 points on buying in interest rate sensitive auto, realty and banking stocks as RBI steps matched with the street expectations.

The 30-share barometer closed 57.56 points higher at 18,077.61 points after an early range bound trade. Among the 30 BSE index components, 20 stocks closed with gains and nine ended with losses, while NTPC held unchanged.

Targetting to check the double digit inflation, RBI hiked its short-term lending and borrowing rate by 0.25 and 0.50 per cent respectively, which was well to expectation of the major market players, brokers said.

The bank also raised its projections for economic growth to 8.5 per cent this fiscal from the earlier estimate of 8 per cent, which further bolstered the market sentiment.

Banking stocks were in keen demand on expectations of better quarterly earnings. The BSE bankex rose by 0.69 per cent to 11,478.26 points after stocks of State Bank of India surged by Rs 26.15 to Rs 2,435, Punjab National Bank by Rs 14.35 to Rs 1,053.15 and HDFC Bank by Rs 13.65 to Rs 2,065.75.

ICICI Bank, Bank of India, Federal Bank, Kotak Mahindra Bank, Union Bank and Central Bank stocks also recorded handsome gains.

The broad-based National Stock Exchange index Nifty rose by 12 points to 5,430.60 points. The auto sector index gained the most by 2.44 per cent to close at 8,337.96 as Bajaj Auto surged by Rs 123.35 to Rs 2,649.95 and Hero Honda by Rs 53.85 to Rs 1,865.70. The realty sector index rose by 1.47 per cent to 3,461.25 as DLF, the biggest real estate developer, gained 2.06 per cent to Rs 319.50 on reports the domestic economic recovery firmly in place and strengthening.

A mixed pattern in the Asian region and higher opening in Europe this afternoon remained a positive factor for themarket throughout the later half.

TOI

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