Markets surge after RBI cuts repo rate by 50 bps

The markets surged led by financials after the surprising move by the Reserve Bank of India which announced repo rate cut by 50 basis points. The BSE Sensex which was up just 70 points before the announcement surged 180 points and the Nifty jumped over 70 points.

However, profit taking was seen at higher levels. The 30-share Sensex was up 145 points at 17,296 levels and the NIfty was up 44 points at 5,271 levels. 

The RBI today announced reduction in repo rate by 50 basis points to 8% and kept the cash reserve ratio unchanged at 4.75%.  According to a consensus, market experts were expecting a rate cut of just 25 basis points.

 Asian shares continue to trade in negative terrain on Tuesday, as soaring Spanish borrowing costs underscored the fading impact of the European Central Bank's bond purchases and stoked investor nervousness over euro zone debt.

On the sectoral front, BSE PSU index was the top gainer up 1.5% followed by Metal Index, Realty, Power, Bankex, FMCG and Auto Indices which were all up over 1% each. 

The gains in the Sensex were led by financials with ICICI Bank up 1.8%, SBI up 2.6% and HDFC was up 1.2%.

Among other Sensex gainers ITC was 1.2% and software major TCS gained 1.4%.

Coal India was up 3.2% after the company’s board of directors approved the draft of the fuel supply agreements (FSA) to be signed with power plants before April 20 with almost a negligible penalty level in case they fail to meet 80% commitment mark. The board has decided to keep the penalty at 0.01% of the value of shortfall.

Among other shares, Fulford India, the subsidiary of Merck & Co. Inc has zoomed nearly 20% to Rs 954 in morning trades, extending its two days’ gain on back of huge volumes.

The overall market breadth was positive as 1,366 stocks have advanced against 866 declining ones, on the BSE.