Sensex jolted by rate hike, banking stocks aid recovery
Reserve Bank of India’s move of hiking the repo rate and the reverse repo rate by 25 and 50 basis points respectively halted a seven-day long party at the stock markets.business Updated: Sep 16, 2010 23:33 IST
Reserve Bank of India’s move of hiking the repo rate and the reverse repo rate by 25 and 50 basis points respectively halted a seven-day long party at the stock markets.
Hoever, the impact was not too much as the Bombay Stock Exchange (BSE) benchmark Sensex fell by just 84 points or 0.4 per cent, to end the day at 19,417.4 points on Thursday.
The biggest gainers during the day on BSE were real estate and banking indices, which gained by 1.2 per cent and 0.6 per cent respectively.
“The monetary policy action will not lead to a sharp rise in the interest rates, and that has led to gain the real estate and the banking stocks,” said Ajay Parmar, head of research at Emkay Global Financial Services.
The country’s largest banker, State Bank of India, saw its share price rise by 1.3 per cent during the day while the share prices of Bank of Baroda and PNB rose by 2.1 per cent and 1.2 per cent respectively.
In the private sector, HDFC Bank and ICICI Bank saw their share prices rise by 0.8 and 0.4 per cent respectively.
Real estate companies, which are the most sensitive to any movement in the interest rates, also witnessed a jump in the share prices.
DLF and Unitech rose by 2.7 per cent and 1.6 per cent respectively during the day.
The Sensex remained volatile during the trading day. It fell by over 100 points immediately after the monetary policy announcement, but then rose sharply to gain over 100 points over Wednesday’s closing, before ending the day marginally low.