Sensex ends 207 points up on repo rate cut, strong Europe cues

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%, 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%, 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% ahead of much awaited Spain's auction of treasury bills. Britain's FTSE gained 0.8% and the Dow Jones futures rose 46 points.

Back home, the central bank increased borrowing limit under marginal standing facility to 2% from 1% of net demand & time liabilities. Banks can use this facility during a considerable shortfall of liquidity.

Naresh Takkar, MD & CEO of ICRA said, "Based on the hawkish guidance provided by the RBI that the space for further reduction in policy rates is limited and the upside risks to inflation, we expect further Repo rate and CRR cuts to be restricted to 25 bps each in FY13. The increase in the limits under the Marginal Standing Facility would also improve the liquidity situation."

Country's largest lenders State Bank of India and ICICI Bank were up 1.5% and 1.4%, respectively. Housing finance company HDFC advanced 0.9%.

Engineering and construction major Larsen & Toubro rose 2.5% while state-owned BHEL went up 0.9%.

State-owned oil & gas producer ONGC topped the buying list among Sensex 30, rising 3.6% while Cairn India fell 1.25% and Reliance Industries dropped 0.25% ahead of their March quarter results this week.

Top telecom operator Bharti Airtel moved up nearly 2%. Tata Consultancy Services, country's largest software services provider shot up 2% while rival Infosys rose 0.5%.

Largest mining company Coal India surged 3% post penalty on fuel supply shortfall being drastically reduced to 0.01% of value of deficit from current 10% level.

Metal stocks rallied quite nicely with the BSE Metal Index moving up 2%. Tata Steel, Hindalco, Sterlite Industries and Jindal Steel gained 1.5-3%.

Anil Dhirubhai Ambani Group's stocks - Reliance Communications and Reliance Infrastructure gained 5.5-6% whereas Reliance Power was up 3.6%.

Cigarette major ITC jumped 2%. Realty estate firm DLF shot up 2.7%.

However, gold loan financing company Manappuram Finance plunged 6% after the Reserve Bank cut banks exposure to gold loan NBFCs to 7.5% versus 10%. However, Muthoot Finance gained 2% after the company said it would not have major impact.

Advancing shares outnumbered declining by 863 to 566 on the National Stock Exchange.

At 14:55 hours IST: Sensex gains 200 pts; RComm, Rel Infra, Rel Cap surge 5-6%

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% while the Britain's FTSE went up 0.8% ahead of a closely-watched Spain's auction of treasury bills.

The BSE benchmark surged 207 points or 1.2% 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%, 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%.

Engineering and construction major Larsen & Toubro and India's No. 1 software services exporter Tata Consultancy Services gained 1.9% each.

Top lenders State Bank of India and ICICI Bank went up 1.6% and 1.4%, respectively. Housing finance company HDFC was up 1%.

Shares of Anil Dhirubhai Ambani Group companies like Reliance Capital, Reliance Communications and Reliance Infrastructure surged 5-6%. Top telecom operator Bharti Airtel jumped 1.7%.

At 13:52 hours IST: Volatile Sensex stays higher; European markets rebound

The BSE Sensex was trading higher with 0.4% gains led by banks, technology, infrastructure and mining stocks. Even European markets, which opened lower, gained 0.5-0.8%. However, the fall in India's most valued stock Reliance Industries (down 0.55%) 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% 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, ''Today'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% 2021 bond increased by 0.63% to 102.8 and 8.79% 2021 bond yield went down by 1.15% to 8.3574.

State Bank of India, country's largest lender climbed 1% while its rival ICICI Bank was up just 0.4%. 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% while two-wheeler majors Bajaj Auto and Hero Motocorp gained 1% each.

State-owned ONGC and coal mining company Coal India rallied 2.5-3%.

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%.

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%, 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% each while rivals State Bank of India and HDFC Bank were down 0.4% 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% each.

However, shares of state-owned ONGC and Coal India gained 2% and 2.6%, respectively.

ITC, TCS, HDFC, NTPC, Hero Motocorp, Sun Pharma, Bharti Airtel and Cipla moved up 0.4-1%.

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% 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% each.

The BSE benchmark moved up 128 points or 0.75% 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% versus 1% earlier, which will provide comfort on liquidity, says the RBI. Central bank forecasts WPI inflation for FY13 at 6.5%. 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% and 1.4%, respectively.

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Cigarette major ITC rose 0.9% and FMCG company HUL was up 0.5%. State-owned oil & gas producer ONGC moved up nearly 3%.

Shares of Coal India topped the buying list, rising 3% after the lower than expected penalty (of 0.01% 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% each.

Manappuram Finance tanked nearly 6% and Muthoot Finance lost 2% after the RBI cuts banks' exposure to gold loan NBFCs to 7.5% as against 10% 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% post the banking regulator Reserve Bank of India cut repo rate by 50 basis points to 8%, 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% and 2%, respectively while rival HDFC Bank was up just 0.6%.

State-owned oil & gas producer ONGC shot up nearly 3% while Reliance Industries gained 0.35%.

Engineering and construction major Larsen & Toubro jumped 1.5% and state-owned BHEL rose 1%.

However, only Infosys, software services provider continued to underperform, falling 0.26%.

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%

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 today, 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% while the top lender State Bank of India was down just 0.15%.

Index heavyweights Reliance Industries, Larsen & Toubro and Infosys declined 0.5% each while BHEL gained 0.35%.

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% each.

Largest coal mining company Coal India continued to trade higher with more than 2% gains after the board members agreed to ink fuel supply agreements (FSAs) with power producers and to pay penalty of 0.01% 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%.

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 today. Traders booked profits in banks stocks ahead of policy while index heavyweights Reliance Industries and Infosys continued to fall, losing 0.6% and 0.3%, 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 today. 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% 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% 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% 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% post better than expected numbers in Q4. Its PAT rose 13.8% QoQ to Rs 68.9 crore while estimate was at Rs 58 crore.

Hotel Leela was up 4% 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%.

Sundaram Fasteners and Viceroy Hotels gained 5%.

Golden Tobacco moved up 5%; 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%.