Moneycontrol Bureau
Banks stocks remained subdued on Dalal Street on Tuesday after RBI’s status quo policy, but a dramatic late recovery helped equity benchmarks close higher for the third consecutive session. Meanwhile, the rally in broader markets continued.
The 30-share BSE Sensex rose 12.13 points to 28516.59 and the 50-share NSE Nifty advanced 0.40 point to 8660.30 while the BSE Midcap index jumped 0.7 percent and Smallcap gained 1.2 percent.
There was no surprise from RBI Governor Raghuram Rajan as the central bank left key policy rates unchanged, which was largely expected. While keeping the repo rate at 7.5 percent and cash reserve ratio at 4 percent, RBI said going forward, the accommodative stance of monetary policy will be maintained, but monetary policy actions will be conditioned by incoming data.
Rajan clarified that the US Fed's rate hike cycle will not be the central factor determining future RBI actions.
However, in his policy statement, the governor turned the screws on banks prodding them to bring interest rates down. Meanwhile, bankers said they will wait for deposit costs to fall further.
In the banking & financial space, ICICI Bank, Axis Bank and State Bank of India fell 1-1.7 percent while HDFC Bank and HDFC gained marginally.
Metals topped the buying list on Sensex today with the BSE Metal Index rising 2 percent. Tata Steel rallied 5 percent followed by Sesa Sterlite with 3 percent and Hindalco with 1.7 percent.
Reliance Industries was up 1 percent as CLSA believes Q4FY15 will be a record quarter driven by sharp improvement in refining margin. The brokerage reiterated buy rating on the stock with over 50 percent upside in next 12 months.
Larsen and Toubro gained 0.8 percent as CLSA advised buying the stock with increased target price of Rs 2,100. According to the report, L&T offers a good proxy on capex revival.
Shares of TCS, M&M, Bharti Airtel, NTPC, Bajaj Auto and Tata Power advanced 1-3 percent whereas Tata Motors and Hero Motocorp fell more than 1 percent.
BHEL declined 0.7 percent as Credit Suisse has maintained its underperform rating on the stock, citing disappointing Q4FY15 earnings particularly on margins.
Healthcare stocks too saw profit booking today after big run up in last few sessions. Sun Pharma and Cipla declined 1 percent each.
In the broader space, SE Investments and SKS Microfinance gained 9-11 percent after the Reserve Bank of India expanded loan limits for microfinance units.
State-run MMTC climbed 6 percent after the company received orders for import of steam coal from Coal India and Andhra Pradesh Power Development Company. The market breadth remained positive as 1659 shares advanced against decline of 1098 shares on the Bombay Stock Exchange.
Global markets like Shanghai and Nikkei closed with handsome gains today, up 1-2.5 percent while European markets were trading 1 percent higher (at 16 hours IST). In positive macro data, UK Services PMI jumped to 58.9 in March against 56.7 in February.
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