Policy rates in sync; bulls cheer

Today's major news

Reserve Bank of India hikes repo, reverse repo and CRR by 25 basis points

Direct tax collection falls short of FY2010 target

Axis Bank’ Q4FY2010 net profit up by 31.5%; the stock jumped 2.51%

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Global signals

European equities were trading in positive territory on gains in banking scrips. As of writing of this report, FTSE 100 (London) was trading 0.49% up.

All the major Asian indices except Shanghai Composite (China) and Nikkei (Japan) closed in green. SGX Nifty closed 31 points higher.

US stock futures point to flat to positive start for the Wall Street on Tuesday. Goldman Sachs will be in focus as the company is expected to report is first quarter earnings.

Indian indices

Bulls make RBI monetary policy review a launching pad to snap the five-day-long losing streak to end the session higher. The Reserve Bank of India raising the repo, reverse repo and cash reserve ratio (CRR) by 25 basis points each was in line with the market’s expectations.

Opening six points lower (at 17395), bulls leveraged on fair to good India Inc earnings to move higher. But the going got difficult as investors opted to stay at sidelines in wake of the monetary policy review due afternoon. With the policy coming out in line with the street’s expectations, bulls charged with rate-sensitive counters—banking and realty—pushing the market to the day’s high of 17560. Post-lunch, bulls lost some ground on selling in information technology stocks to sign off the session with a little more than a consolatory win. Sensex closed 60 points higher at 17460, while Nifty shut at 5230, 26 points up.

Market sentiment

Advancing shares outnumbered trailing ones far convincingly. Of the 2,967 stocks traded on the BSE, 2,088 stocks advanced, whereas 785 stocks declined. Ninety four stocks closed unchanged.

Sectoral & stock screening

Interest rate sensitive sectors like realty and banking sectors topped the chart of gainers as BSE Realty and BSE Bankex surged by 3.08% and 1.53% respectively. On flip side, BSE IT and BSE TECk were the only indices that closed in negative with losses of 1.28% and 1.00% respectively.


The top picks were Procter & Gamble (up 6.51%), Nagarjuna Constructions (6.28% up) and Adani Enterprises (higher 6.20%). And the worst picks were Tata Consultancy (down 2.74%) despite a strong FY2010 earnings and Zee Entertainment (2.58% down).

Viewing volumes

Realtors gained on policy rate reviews. With over 1.45 crore shares changing hands on the BSE, Unitech, India’s second largest realty company, was the most actively traded share, followed by wind turbine major Suzlon Energy (0.50 crore shares), steel maker Ispat Industries (0.36 crore shares), industrial finance company IFCI (0.27 crore shares) and India’s largest realty firm, DLF (0.22 crore shares).