Nifty crosses 6,100 mark on RBI's rate-cut move

Indian equity markets, which rebounded into green zone instantly after the rate cut announcement, retreated slightly but remained firm in the late morning session. Meanwhile, Reserve Bank of India has slashed its repo rate by 25 basis points (bps) to 7.75% against 8% earlier in third quarter review of monetary policy 2012-13. Unexpectedly, the central bank also reduced the cash reserve ratio (CRR), of scheduled banks by 25 bps to 4%, which will infuse around Rs 18,000 crore into the banking system. The BSE benchmark Sensex was up by 67.43 points while Nifty index of the National Stock Exchange crossed 6,100 mark. In currency market, rupee erased all early losses and recovered against dollar cheering RBI’s move. On sectoral front, bank, automobile and realty stocks came off their lows and moved in positive territory post rate cut announcement, while consumer durables and oil stocks were mostly subdued. In global markets, most Asian shares were trading higher, as recent selling drew bargain hunters ahead of more US economic data and a Federal Reserve policy decision later in the week that may offer clues to the Fed's stimulus plans. Back home, the market breadth favoring positive trend; there were 1,236 shares on the gaining side against 1,094 shares on the losing side while 115 shares remain unchanged.

The BSE Sensex is currently trading at 20,170.78 up by 67.43 points or 0.34% after trading in a range of 20,203.66 and 20,029.42. There were 21 stocks advancing against 9 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.57% and Small cap index was up by 0.23%.

The few gaining sectoral indices on the BSE were, Realty up by 1.20%, Bankex up by 0.98%, Metal up by 0.83%, Health Care up by 0.62% and Auto up by 0.43%. While, Consumer Durables down by 0.26% and Oil & Gas down by 0.16% were the top losers on the index.

The top gainers on the Sensex were ICICI Bank up by 2.05%, Jindal Steel up by 1.50%, Tata Motors up by 1.41%, Tata Power up by 1.23%, and Cipla up by 1.11%.

On the flip side, Wipro down by 1.20%, HDFC Bank down by 0.82%, Bajaj Auto down by 0.62%, Mahindra & Mahindra down by 0.51% and ONGC down by 0.48% were the top losers on the Sensex.

Meanwhile, India's economic growth could fall to 5.5% this financial year before seeing gradual recovery next year, as per the RBI-sponsored survey. The latest estimate of the RBI, coming a day ahead of its quarterly monetary policy review, is lower than the government's revised annual growth estimate of 5.7%.

As per the 22nd round of survey by professional forecasters of RBI, the median growth projection has been revised downwards to 5.5% on the back of slower growth for 2012-13 fiscal. The RBI had earlier projected a growth rate of 5.8%, while the government expects the economy to grow by 5.7% in the current fiscal.

Further, the RBI sponsored survey stated that there would be a gradual recovery in 2013-14 and the economy could clock a growth of 6.5%. The Indian economy grew at over 8% for two consecutive years before declining to 6.5% in 2011-12 fiscal.

Moreover, third quarter review of macroeconomic and monetary developments, growth in 2012-13 is likely to fall below the reserve bank's baseline projection of 5.8% due to supply and infrastructure bottlenecks and slack in external demand. Further RBI added that it is imperative that recent reform measures continue to be executed efficiently and domestic inflation recedes further to support sustainable recovery in India. 

The S&P CNX Nifty is currently trading at 6,103.15 up by 28.35 points or 0.47% after trading in a range of 6,111.80 and 6,056.15. There were 37 stocks advancing against 13 declines on the index.

The top gainers of the Nifty were Axis Bank up by 4.89%, JP Associate up by 3.06%, ICICI Bank up by 1.91%, Sesa Goa up by 1.64% and DLF up by 1.59%.

On the flip side, Wipro down by 1.27%, BPCL down by 0.87%, HDFC Bank down by 0.81%, Bajaj Auto down by 0.80% and ONGC down by 0.58% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite added 0.15%, Jakarta Composite rose 0.28%, KLSE Composite up by 0.13%, Nikkei 225 surged 0.39%, KOSPI Composite gained 0.84%and Taiwan Weighted was up by 1.13%.

On the flip side, Straits Times declined 0.07% and Hang Seng was down by 0.08%.