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Interest-rate sensitive realty, auto and bank stocks today made handsome gains, surging as much as 9% following RBI Governor Raghuram Rajan's move to give more funds to banks for lending even as he left rates unchanged for the third straight time.
Shares of Housing Development and Infrastructure Ltd soared 8.63%, while Unitech surged 6.36% and DLF rose by 2.09% on the BSE.
Led by the gains in these stock, the BSE realty index ended 2.65% higher at 1,943.55.
From auto pack, Mahindra & Mahindra climbed 3.83%, Bajaj Auto gained 2.96%, Tata Motors (2.20%) and Maruti Suzuki India (0.68%).
Following the gains in these scrips, the BSE auto index settled 2.11% up at 15,886.81.
Among banking stocks, HDFC Bank went up by 0.84% and SBI rose by 0.36%.
Bank of Baroda jumped 1.24%, PNB rose by 0.91%.
"The RBI kept key policy rates unchanged and cut SLR or statutory liquidity ratio by 50 bps. Led by this rate sensitive sectors like realty and auto were top gainers," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.
The Reserve Bank of India in its third bi-monthly monetary policy today kept the key policy rate unchanged but slashed statutory liquidity ratio (SLR) by 0.5% to unlock about Rs 40,000 crore into the system.
Also, it reduced the ceiling of banks total holdings of SLR securities under the held to maturity to 24% from 24.5% of net demand and time liabilities.
"Monetary policy was in-line with market expectations. SLR cut is a step in the right direction that will result in more money being available for the private sector.
"With the RBI and government both committed to bringing down inflation, there is already progress on achieving the same and eventually ridding the economy completely of the high inflation in past few years is likely to be a very positive catalyst for the economy and markets," said Dinesh Thakkar, Chairman & Managing Director, Angel Broking.
In the broader market, the BSE benchmark Sensex ended at 25,908.01, up 184.85 points.
