Mumbai June 7 (IANS) Cheered by the decision of the Reserve Bank of India (RBI) to boost liquidity levels in the commercial banking system the Indian equity markets on Wednesday recovered from a flat trading session to close in the green.
The RBI in its second bi-monthly monetary policy review of 2017-18 decided to reduce the Statutory Liquidity Ratio (SLR) by 50 basis points to 20 per cent. However it kept its key lending rate unchanged at 6.25 per cent.
Besides a better-than-expected monsoon forecast by the India Meteorological Department (IMD) coupled with firm global cues and healthy buying in banking automobile and healthcare sectors kept market sentiments buoyant.
The Nifty of the National Stock Exchange (NSE) closed at 9 663.90 points -- up 26.75 points or 0.28 per cent
The 30-scrip Sensitive Index (Sensex) of the BSE which opened at 31 252.71 points closed at 31 271.28 points -- gaining 80.72 points or 0.26 per cent from its previous close at 31 190.56 points.
It touched a high of 31 346.99 points and a low of 31 172.98 points during intra-day trade.
The BSE market breadth was bullish -- with 1 460 advances and 1 200 declines.
The broader market indices outperformed the Sensex with the S&P BSE mid-cap index rising by 0.46 per cent and the small-cap index by 0.75 per cent.
Markets ended with modest gains on Wednesday after witnessing intra-day volatility after the RBI decided to keep the repo-rate unchanged after a policy review meet today. Good prospects of rains and firm global stocks supported gains on the bourses Deepak Jasani Head - Retail Research HDFC Securities told IANS.
Interest rate-sensitive stocks like banks auto and realty rose after the RBI kept rates steady. Major Asian markets have ended on a mixed note while European indices like FTSE 100 CAC 40 and DAX traded higher.
According to Dhruv Desai Director and Chief Operating Officer of Tradebulls the Bank Nifty hit a record high after RBI cut the SLR.
The RBI used a less hawkish tone while leaving interest rates unchanged at its policy meeting as inflation is running well below forecasts and the economy has slowed more than expected. This prompted the rupee to strengthen against the US dollar Desai said.
On the currency front the rupee strengthened by 10 paise to 64.33 per US dollar from its previous close of 64.43.
In investments provisional data with the exchanges showed that foreign institutional investors (FIIs) purchased stocks worth Rs 73.79 crore while domestic institutional investors (DIIs) bought scrips worth Rs 166.22 crore.
Banking stocks too got a boost after RBI lowered inflation target for the year. The IT sector traded negative by 1.83 per cent after Infosys COO (chief operating officer) said that clients are seeking 20-30 per cent price discount from the company Desai added.
Sector-wise the S&P BSE banking index rose by 193.07 points the automobile index by 167.90 points and the healthcare index by 148.51 points.
On the other hand the S&P IT index plunged by 207.16 points and the Teck (technology media and entertainment) index was down by 88.72 points.
Major Sensex gainers on Wednesday were: Reliance Industries up 1.96 per cent at Rs 1 339.20; ICICI Bank up 1.91 per cent at Rs 324.75; Mahindra and Mahindra (M&M) up 1.49 per cent at Rs 1 432.75; Sun Pharma up 1.31 per cent at Rs 511.15; and Hindustan Unilever up 1.27 per cent at Rs 1 106.70.
Major Sensex losers were: Tata Consultancy Services (TCS) down 2.97 per cent at Rs 2 615.35; Wipro down 2.10 per cent at Rs 548.85; Infosys down 1.83 per cent at Rs 961.50; Tata Motors down 0.64 per cent at Rs 457.95; and Adani Ports down 0.59 per cent at Rs 359.70.
--IANS
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Equity markets rise after RBI cuts SLR to induce liquidity (Roundup)
