RBI in India Lifts Key Rates by 0.25%

123jump.com Staff
20 Apr, 2010
New York City

Reserve Bank of India lifted key rates by 25 basis points, lower than expected. Rupee and stocks closed higher. The RBI estimates inflation to decline to 5.5% by the end of fiscal year from the current rate of 9.9% and estimated fiscal year economic growth rate of 8%. TCS quarterly net soars 50%.

[R]6:00 PM Mumbai, 8:30 AM New York – Reserve Bank of India lifted key rates by 25 basis points, lower than expected. Rupee and stocks closed higher. The RBI estimates inflation to decline to 5.5% by the end of fiscal year from the current rate of 9.9% and estimated fiscal year economic growth rate of 8%. Software services provider, TCS net soars 50%.[/R]

Stocks in Mumbai trading closed higher after the Reserve Bank of India raised rates lower than expected. The RBI lifted reverse repurchase rate to 3.75% and repurchase rate to 5.25%. Both rates were increased 25 basis points.

Stocks closed higher as most investors had factored a rise of as much as 50 basis points. The lower increase in the rate shows the central bank bias in maintaining the growth rate and controlling the inflation rate.

In the accompanying statement the RBI estimated wholesale inflation to decline to 5.5% by the end fiscal year in March from the current rate of 9.9% and estimated annual economic growth of 8%.

The Sensex increased 59.90 or 0.34% to 17,460.58 and CNX Nifty index rose 29.15 or 0.56% to 5,232.80. Among the Sensex 30 stocks, 18 rose and 12 fell.

On BSE trading, 2,073 stocks advanced, 749 declined and 85 were unchanged. Rate sensitive banking and realty stocks gained. But, Reliance Industries reversed early gains.

Eight real estate developers gained between 1.40% and 3% after the Reserve Bank of India kept risk weights for commercial real estate loans unchanged at its annual monetary policy review today.

Rupee edged higher 16 paisa to 44.57 against one dollar.

Gainers & Losers

Axis Bank Limited gained 2.5% to Rs 1,186.50 as net profit grew 31.5% to Rs 764.8 crores and net interest income grew 41.4% to Rs 1,460.00 crore from a year ago.

Dynamatic Technologies rose 2.6% to Rs 1,175 after the company signed a pact with Israel based BlueBird Aero Systems for manufacturing, assembling and marketing mini and micro tactical unmanned aerial vehicles in India.

Ferro Alloys Corporation Limited gained 4.9% to Rs 24.60 and the company is in talks for a strategic stake in Uttam Galva, with ArcelorMittal, the world’s largest steel maker having bought equity in this specialty steel producer.

Hero Honda Motors Limited fell 2.3% to Rs 1,851.65 due to pressure of commodity prices increasing despite the motorcycles manufacturer fourth quarter sales rising 19.6% to Rs 4,093 crores and net profit rising 48.8% to Rs 598 crores from the year ago quarter.

Jindal Saw Limited rose 0.4% to Rs 215.00 and the pipe maker fourth quarter net profit surged 86% to Rs 178 crore compared to the year ago quarter despite lower sales.

Manali Petrochemicals Ltd surged 9.7% to Rs 11.50 and the company fourth quarter net profit surged 88.8% to Rs 7.76 crore.

Sesa Goa Limited fell 0.6% to Rs 456.30 as the iron ore producer’s fourth quarter sales rose 77.5% to Rs 2,813.2 crore and net profit for the quarter rose 121.5% to Rs 1,213 crore or Rs 14.61 per share compared to net profit of Rs 547.6 crore or Rs 6.96 per share a year ago.

Sonata Software Limited fell 2.1% to Rs 60.50 as the company’s fourth quarter net profit declined 3.5% to Rs 15.79 crore.

TAKE Solutions Limited gained 3.1% to Rs 26.35 as the business technology subsidiary entered into a partnership with the U.S. based DataMAX Software Group, Inc.

Tata Consultancy Services Limited fell 2.7% to Rs 789.60 an information technology company said fourth quarter sales rose 8% to Rs 7,738 crore from Rs 7,172 crore a year ago. Net profit for the quarter rose 50% to Rs 2,001 crore compared to net profit of Rs 1,333 crore a year ago.