)
Benchmark indices continue to remain firm led by financials after the RBI on Monday further eased liquidity by cutting the marginal standing facility (MSF) rate, a key overnight interest rate, by 50 basis points to 9%.
By 10:20, the Sensex was higher by 225 points at 20,121 mark and the Nifty gained by 67 points at 5,973 levels.
According to Chandan Tapraria, derivative analyst at Anand Rathi Financial Services, ‘’Nifty future has been trading in a range of 5750 to 6015 from last three weeks and now if it sustains above 6020 then only further move may be seen in the market. Nifty future if sustains above 6020 then rally may continue towards 6060-6100 levels.”
On the global front, growth in China's services industry slowed in September and optimism over the business outlook weakened, a private survey showed on Tuesday, indicating that the nascent recovery in the world's No.2 economy is likely to remain a slow one.
The Markit/HSBC services PMI for September dipped to 52.4 from August's 52.8, still well above the 50 line that separates expansion from contraction. A rise in new business offset a decline in new orders, the survey said.
The rupee was trading stable in early trades due to thin dollar demand. But currency dealers believe that bids from private oil marketing companies will emerge during the day.
At 9:50am, the rupee was trading at Rs 61.80, the same level as yesterday's close. Currency dealers also opine that state-run banks may start buying dollars on behalf of the central bank to boost the foreign exchange reserves kitty.
On the sectoral front, BSE Bankex has surged by nearly 3% followed by counters like Realty, Capital Goods, Auto, Consumer Durables and PSU, all gaining between 1-2%. Infact, all the major BSE sectoral indices are trading in positive zone.
Banking shares have rallied up to 8% in morning deals on the National Stock Exchange after the Reserve Bank of India on Monday after market hours eased interest rate on borrowings under the marginal standing facility (MSF) by 50 basis points (bps) to 9%.
The MSF is an emergency window that banks borrow from when faced with a funds crunch.
The NSE banking index Bank Nifty has surged 3.2% at 10,403 points as compared to 0.95% rise in benchmark index CNX Nifty.
YES Bank, IndusInd Bank, Kotak Mahindra Bank, Axis Bank, Union Bank of India, ICICI Bank and Bank of Baroda from Bank Nifty are up in the range of 3-8%. State Bank of India, Bank of India, HDFC Bank, Punjab National Bank and Canara Bank are trading higher between 2-3% on the NSE.
Other notable gainers are Bharti Airtel, Tata Motors, L&T, Tata Power and ITC.
On the losing side, Coal India and Hindalco are trading in red zone.
Among other shares, Apollo Tyres is trading higher by 3% at Rs 71.70, extending its previous day’s 5% rally, on reports that the company was looking to renegotiate the value of its $2.5-billion deal to acquire US-based Cooper Tire & Rubber Co (CTB) due to persisting labour issues at the CTB’s Chinese and American facilities.
Escorts has surged 5% at Rs 96.25,extending its previous day’s nearly 6% rally, after reporting a strong 33% year-on-year (yoy) growth in total sales at 6,465 tractors in September 2013.
The broader markets continue to under perform the benchmark indices- BSE Midcap and Smallcap indices have gained nearly 1% each.
The market breadth in BSE remains firm with 1,185 shares advancing and 465 shares declining.
