Sensex gains over 100 points; banks rally on RBI steps

Reuters Market Eye - The Nifty and the Sensex gain around 0.7 percent, after three consecutive days of declines. Bank Nifty surges 4 percent after the Reserve Bank of India eased cash and bond holding rules for banks on Tuesday.

The RBI relaxed rules on mandatory bond holdings for banks, which would help protect lenders from large mark-to-market losses and said it would buy long-dated government bonds worth 80 billion rupees.

State Bank of India Ltd gains 3.5 percent, while ICICI Bank Ltd is up 2.6 percent.

Among banks whose bulk of lending activities are financed by wholesale deposits, Yes Bank Ltd gains 13.5 percent while IndusInd Bank Ltd is up 10 percent.

 

Tata Motors Ltd gains 0.9 percent ahead of its annual shareholders meeting later in the day.

(Reporting by Abhishek Vishnoi)