Sensex Rallies, Banks Lead

123jump.com Staff
04 Nov, 2008
New York City

Mumbai stocks rallied for the second day this week after a surprise rate cut from the Reserve Bank of India. Prime Minister Singh will review the current financial crisis on a weekly through a new panel. Banks rallied after they indicated a decline in rates for loans and deposits.

[R]2:00PM New York, 11:30 PM Mumbai - Indian stocks rise on bank rate cuts.[/R]

Market Sentiment

Indian stocks rose in highly volatile trade buoyed by financial stocks on the speculation that the interest rate cuts will prop up the financial markets.

The Reserve Bank of India on Saturday cut its key rate by 50 basis points to 7.5%, lowered the bank cash reserve requirements to 5.5% and reduced the reserve purchase of government bonds by 1%.

Intra-day rise for the Sensex was 330.80 and fall was 221.46.

In Mumbai, the BSE 30-share Sensex rose 2.8% or 293.44 to 10,631.12, and the CNX Nifty soared 3.2% or 98.25 to 3,142.10.

Of the stocks traded on BSE 1,809 rose, 777 declined, and 69 shares remained unchanged.

Trading Statistics

Daily turnover on BSE stood at 4,416 crore rupees from 3,679.49 crore rupees yesterday.

IT stocks fell on the speculation that a win by the U.S. Democratic candidate Barack Obama may affect outsourcing.

Gainers & Losers

Reliance Industries rose 2% to 1,466 rupees after reports that it may reopen most of its petrol pump stations.

Ranbaxy Laboratories rose 9.9% to 209.15 rupees, Jaiprakash Associates soared 9.8% to 89.45 rupees and Tata Power Company advanced 8.3% to 750.95 rupees.

Bharat Heavy Electricals increased 5.4% on news that it is planning to triple export orders to 10,300 crore rupees by 2012.

Sterlite Industries fell 2%.

Financial stocks increased on the news that public sector banks are likely to cut deposit and lending rates by 50 to 75 basis points within a week.

State Bank of India jumped 6.5% after chairman O P Bhatt said it will cut interest rates by up to 50 basis points.

Bank of Baroda rose 15.5% after electing to reduce lending rates by 75 basis points from tomorrow.

Indian Bank fell 1.5% after announcing it will consider slashing its lending and deposit rates between 50 and 75 basis points this week.

ICICI Bank rose 6.5% after the bank''s chief executive K.V. Kamath said yesterday it will review interest rates in the coming days.

Also HDFC Bank advanced 3.7% and home loan lender HDFC increased 1.3%.

Real estate developer DLF increased 14.7% after refuting claims its joint venture with Hilton was troubled.

IT stocks plunged on rising worries that a presidential victory by Democratic presidential nominee Barack Obama will affect the country''s outsourcing business. Satyam Computer Services fell 7.4%.

Wipro fell 4.8% on speculation that the company might buy from Citi group, technology and infrastructure outsourcing arm, Citi Technology Services, for an estimated $150 million.

Infosys declined 5.5% and Tata Consultancy Services fell 7.4%.

Zylog Systems rose 2.1% after the company''s board sanctioned the acquisition of PEQ Consulting Inc and Fairfax Consulting Inc.

Airlines increased as state-owned refiners lowered the prices of the fuel by 4.5%.

Cement maker ACC fell 1% as cement exports in October 2008 fell 3.4% to 1.70 million tons from 1.76 million tons a year earlier.

Grasim Industries edged up 2.8% and Ultratech Cement gained 5.5% after Aditya Birla Group''s cement dispatches in October 2008 rose 1.9% from a year ago to 2.54 million tons.

Telecom stocks rose on news the India government will soon be able to allocate spectrum for the roll out of the next generation wireless networks bidders by the end of January 2009. The government has completed an auction this month. Bharti Airtel increased 4.3% while Reliance Communications advanced 7.7%.

Suzlon Energy surged 20.6% after the company said it was negotiating with Portugal-based Martifer to acquire its 22.5% equity stake in the German firm REpower.