Choppy markets end firm, RBI keeps rates steady

Central Bank cuts SLR by 1%

Benchmark share indices ended higher on Tuesday, amid a volatile trading session, as gains in index heavyweights helped offset losses in Bharti Airtel and select bank shares.

The Sensex ended higher by 92 points at 17,236 and the 50-share Nifty jumped 29 points to close at 5,229 levels.

The Reserve Bank of India (RBI) left interest rates unchanged for the second time since June, in line with expectations, while cutting its growth forecast and lifting its inflation outlook as economic conditions deteriorate.

The RBI kept its policy repo rate unchanged at 8% and left the cash reserve ratio (CRR) for banks at 4.75%. CRR is the share of deposits banks must keep with the RBI.

Meanwhile, the European markets were trading on a subdued note as investors feared the recent gains built on anticipation of new stimulus measures from central banks in the United States and Europe had been overdone. The CAC 40 index was up 9 points at 3,330, DAX jumped 34 points to 6,808 while the FTSE was down 10 points at 5,683 levels.

In Asia, markets held on to gains on hopes of further stimulus from the European Central Bank and the US Federal Reserve, both of which hold policy meetings this week.. The Hang Seng jumped 211 points to close at 19,706, Nikkei advanced 60 points to 8,695 and the Taiwan weighted closed higher by 111 points to close at 7,270.

Back home, on the sectoral front, the BSE oil & gas index was the top sectoral gainer. The index advanced nearly 2% or 145 points to shut shop at 8,158 levels. Realty, IT, healthacare, metal, PSU, auto and capital goods indices also closed higher by 0.2-1% each.

ONGC was the top gainer among the Sensex stocks, the stokc jumped nearly 4% to close at Rs 287. Index heavyweight Reliance Industries advanced 2% to end at Rs 743 and Infosys ended up 0.8% at Rs 2,227.

Wipro, HDFC, Cipla, Hindalco, Maruti Suzuki, Sun Pharma, Coal India, tata Steel, Infosys, TCS, Larsen & Toubro and Hindustan Unilever also ended higher in trades today.

On the other hand, Bharti Airtel was the top loser from the heavyweight space. The stock slipped nearly 3% to Rs 300 on reports that the company is planning to raise funds by issuing new shares to the public or institutional investors to pare its massive debt.

Banking sector which is a proxy to the overall economy witnessed weakness after the RBI at its first quarter monetary policy review revised the GDP growth forecast lower to 6.5%. State Bank of India and ICICI Bank were among the top Sensex losers.

At the same time, consumer durables, bankex and power indices closed lower in trades today.

Among the individual stocks, Gulf Oil Corporation soared 3.5% to Rs 90 after the company said it has entered into a joint development agreement with Hinduja Estates Private Limited for development of the company’s land at Hyderabad.

Sun TV Network rallied 3% to Rs 264 on signing agreement with the state-owned Tamil Nadu Arasu Cable TV Corporation Ltd, which help the company to generate additional subscription revenues.

Deccan Chronicle Holdings plunged 7.5% to Rs 15.25, its new low on reports that the state-owned financial institution, IFCI has sought the appointment of a liquidator for the company’s assets.

The broader markets ended marginally higher. The BSE mid-cap index advanced 34 points to close at 6,012 and the small-cap index jumped 8 points to end at at 6,447.

The overall breadth was marginally positive as 1,435 stocks advanced while 1,296 stocks declined.