Rates on Hold in India; Government Speeds Up Project Awards

Mukesh Buch
07 Apr, 2015
New York City

RBI left key lending rate unchanged and lifted its growth outlook in the current fiscal year. GMR Infra received ₹5,080 crore order from Indian Railways. MMTC secured coal import order from Coal India and Andhra Pradesh Power. National Highway Authority awards an order to Supreme Infra.

[R]6:00 PM Mumbai – RBI left key lending rate unchanged and lifted its growth outlook in the current fiscal year. GMR Infra received ₹5,080 crore order from Indian Railways. MMTC secured coal import order from Coal India and Andhra Pradesh Power. National Highway Authority awards an order to Supreme Infra.[/R]

Stocks on Dalal Street gyrated after the Reserve Bank left its reference rate unchanged.

The central bank also lifted its economic growth target to 7.8% in the current financial year ending in March 2016 from the estimated growth rate of 7.5% in the previous financial year ending in March of 2015.

At the end of its first monetary policy meeting in the year, the RBI left its short term lending or repo rate at 7.5% and cash reserve ratio at 4%.

The central bank also kept its statutory liquidity ratio at 21.5% and sounded cautiously optimistic on inflation but said future course of inflation is dependent on the oil price and supply forces.

The central bank estimated a gradual decline in inflation to 6% by January 2016 and decline further to 4% before March 2018.

The BSE Sensex index opened higher in the morning but after the announcement fell as much as 140 points but managed to recover most of the losses by the end of the session.

The Sensex index had logged a surge of 546.97 in the last two sessions.

Rupee weakened 7 paisa 62.25 against one dollar.

The Sensex Index added 12.13 to close at 28,516.59. The CNX Nifty rose 0.40 to 8,660.30.

Gainers & Losers

GMR Infrastructure, Ltd gained 5% to ₹17.70 and the infrastructure services provider received an order for railway project with an estimated cost of ₹5,080 crore.

Future Retail Ltd advanced 1.6% to ₹101.35 after the apparel retailer raised ₹600 crore through non-convertible debenture offering.

MMTC Limited jumped 6.2% to ₹53.20 after the minerals exporter won orders for import of steam coal from Coal India and Andhra Pradesh Power Development Company Limited.

Power Finance Corporation Limited dropped 1.6% to ₹273.25 and the central government plans to sell 5% stake to raise about ₹1,500 crore.

Supreme Infrastructure India Limited climbed 6.8% to ₹235.70 after infrastructure developer secured contract worth ₹207.15 crore from National Highways Authority of India.

Rural Electrification Corporation Limited declined 4.2% to ₹321.65 after the central government plans to sell 5% stake in the company to raise ₹1,600 crore.