RBI Hikes CRR, Realty and Banks Surge

123jump.com Staff
29 Apr, 2008
New York City

The Reserve Bank of India left its key rate unchanged at 6% and issued a guideline to fight inflation and control liquidity. The central bank hiked cash reserve ratio by 25 basis points to 7.75%. The RBI also said that the inflation for the current fiscal year should be brought down to 5% and in the longer term to 3%. The central bank also estimated the economic growth rate in the current fiscal year between 8% and 8.5%.

[R]10:00AM New York, 7:30PM Mumbai - RBI keeps interest rates unchanged, Sensex surges on rising stocks in banking and real estate sectors.[/R]

Indian shares recovered from Monday losses after the Reserve Bank of India kept the interests rates unchanged.

In Mumbai trading, the 30-share BSE Sensex rose 2.1% or 362.50 at 17,378.46 levels, the highest in two months.

On the National Stocks Exchange CNX Nifty gained 2.1% or 105.85 to close at 5,195.50 levels.

In the day, banking stocks gained after the RBI''s policy announcement. State Bank of India, HDFC Bank and ICICI Bank climbed.

Software shares rose after the Finance Minister extended tax exemption for the IT sector by a year.

Realty stocks surged in late trade. Indiabulls Real Estate and Unitech recorded gains.

Of the BSE traded shares, 1,588 shares gained 1,121 stocks declined and 61 stocks remained unchanged.

Turnover

Daily turnover stood at 7,262 crore rupees and 18,087 crore rupees on the National Stocks Exchange.

Reliance Capital was the most active stock on the BSE with the highest turnover of 317.11 crore rupees followed Sesa Goa, Reliance Petroleum, Reliance Natural Resources and Reliance Industries.

Economic News

The Reserve Bank of India said controlling money supply will remain a priority in its policy objectives and warned it would act swiftly to curb any signs of adverse developments in inflation expectations.

RBI has forecast economic growth of 8% to 8.5% in the fiscal year that began this month, after an estimated 8.7% growth in 2007/08.

The central bank said it aims for inflation of around 5.5% this fiscal year with the goal of lowering it close to 5% """"as soon as possible.""""

Gainers and Decliners

Indiabulls Real Estate surged 3.1% to 557.35 rupees, DLF increased 8.6% to 725.85 rupees and Unitech grew 8.2% to 317.50 rupees.

Satyam Computer Services gained 8.2% to 479.35 rupees, Infosys surged 5.2% to 1,750.75 rupees and Wipro advanced 4.7% to 479.20 rupees.

Finance Minister Palaniappan Chidambaram extended tax holiday scheme by an additional year to software exporters as he outlined revisions in the fiscal 2009 budget.

Tata Steel galloped 4% to 808.90 rupees and the National Aluminium Company rose 4.4% to 458.70 rupees, Hindalco Industries gained 6.4% to 198.20 rupees and Steel Authority of India rose 2.1% to 179.40 rupees.

Finance Minister said on Tuesday that the government will impose export tax on basmati rice and some steel products, and cut import duties on key inputs like ferro alloys and metallurgical coke. He took steps to improve domestic supplies and to moderate food price inflation.

State Bank of India rose 3.3% to 1,793.50 rupees, HDFC Bank climbed 2% to 1,547.50 rupees and ICICI Bank rose 0.7% to 901.30 rupees.

Mahindra & Mahindra gained 1.2% to 642.70 rupees, Tata Motors rose 1% to 639.95 rupees and Maruti Suzuki India surged 1.2% to 731.30 rupees.

HDFC rose 6% to 2,881.45 rupees, Larsen & Toubro advanced 2.1% to 3,007.40 rupees, Jaiprakash Associates gained 6% to 266.10 rupees and Ambuja Cements jumped 1.3% to 114.85 rupees. Reliance Communications declined 1.7% to 574.70 rupees

Earnings News

Hindustan Unilever gained 1.5% to 250.85 rupees. The company reported net profit fell 3.04% to 380.95 crore rupees on 19.14% rise in sales to 3,793.94 crore rupees in the first quarter of 2008 from a year ago.

Asian markets review

In Hong Kong Hang Seng index increased 247.86 or 0.97% closed to 25,914.15. In Australia ASX 200 index higher 4.20 or 0.07% to close 5,606.90. In Malaysia KL Composite index decreased 11.66 or 0.90% closed to 1,283.65. There was holiday in Japan.

In South Korea Kospi Index decreased 11.66 or 0.64% to close at 1,811.51, in Thailand SET index closed lower 2.79 or 0.33% to 833.63 and Indonesia JSE Index edged increased 49.22 or 2.18% to 2,303.53. Sensex index in India increased 362.50 or 2.13% to 17,378.46.