Markets up led by rate-sensitives

Realty, Bankex, Auto lead sectoral indices on BSE

Benchmark share indices continued to trade with gains in noon trades on Tuesday led by rate sensitive shares after the Reserve Bank of India at its policy meet today announced a reduction in repo rate and cash reserve ratio by 25 basis points.

The central bank said that it has reduce the policy repo rate, the rate at which RBI lends money to scheduled banks, under the liquidity adjustment facility (LAF) by 25 basis points from 8% to 7.75% with immediate effect.

RBI has also decided to reduce the CRR of scheduled banks by 25 basis points from 4.25% to 4% of their net demand and time liabilities (NDTL) effective the fortnight beginning February 9, 2013.

At 1:05PM the 30-share Sensex was up 25 points at 20,128 and the 50-share Nifty was up 18 points at 6,093.

Asian share indices firmed up on Tuesday led by banks. However, the Hang Seng and Straits Times was trading flat with negative bias. Shanghai COmposite was up 0.5% and the Nikkei was also up 0.4%. Taiwan Weighted and Kospi were the top gainers in the region up 0.8-1.1% each.

The Reality index was the top gainer among the sectoral indices on the BSE up 1.2% followed by Bankex, Metal and Auto indices. However, oil and gas, consumer durables indices were among the losers.

Realty shares gained on hopes of revival of home sales on the back of lower interest rates on home loans. DLF was up 1.3%. Among others , Sobha Developers was up 4.3%, Dewan Housing was up 3.1% and Parsvnath Developers was up 2.1%.

Bank shares firmed up on hopes of loan growth going forward as when they lower lending rates post the central banks decision to ease key policy rate. ICICI Bank was up 2.6% and State Bank of India was up 0.8% and mortgage lender HDFC was up 0.3%.

Auto shares gained on hopes that vehicle sales growth would improve going forward on the back of lower interest rates on auto loans. Tata Motors was up 1.6%, Hero MotoCorp was up 0.7%, Maruti Suzuki was up 0.5%.

Metal shares also firmed up tracking marginal gains on the London Metal Exchange. Jindal Steel was up 1.4%, Sterlite Industries was up 1.2% and Hindalco was up 0.2%.

Other Sensex gainers include, ITC, Bharti Airtel, Cipla and Coal India.

The broader markets pared gains after profit taking was seen at higher levels and the BSE Mid-cap index was up 0.3% and the Small-cap index was up 0.1%.

The market breadth was weak with 1,303 losers and 1,264 gainers on the BSE.