RBI policy day ends well; Sensex up for 9th day

Indian stocks rose after RBI cut the CRR and the government opened its huge market to foreign retailers in a bid to kick-start flagging economic growth. Sensex rose 78 points and the Nifty gained by 32 points in today's trade. Major Headlines of the Day: RBI cuts CRR by 25 bps, leaves key rates unchanged Retail reforms will boost Realtors to kick-start projects Govt can raise LPG cap from 6 to 10 cylinders Govt OKs 51% FDI in Multi Brand Retail Indian indices: It was yet another eventful trading day for the Indian indices. The Indian markets pulled back after a knee-jerk reaction to the Reserve Bank of India's decision to hold policy rates, which left the investors disappointed. The Sensex witnessed a drop of over 200 points from the day's high while the broader Nifty slipped below the 5,600 mark. The rupee, too, pared gains against the dollar. Later, the weak opening of the European markets also weighed on the sentiments. Buying in Realty, CG, Bankex, Power, Oil & Gas, Auto, Metal, CD and PSU were the major supporters. Gains in Index heavyweights like ICICI Bank, RIL, L&T, SBI, HDFC, Tata Motors and Bharti Airtel helped the market to remain higher. Indices extended gains for the 9th day and ended higher in a volatile session. The Sensex hit 14-month high and NSE Nifty closed above the 5600 level for the first time since July 25, 2011, though it was off day's high. The Sensex closed 78 points higher while the Nifty gained 32 points in trade today. Movement of the Indian indices for the day: The Indian markets closed on a positive note in today's trade, with the Sensex and the Nifty rising with modest gains. Today, the Indian indices stayed higher throughout the day owing to gains in index heavyweights which helped the markets to remain in green zone for the entire day. Rate sensitives like banking, realty, capital goods and auto stocks led major support while weakness in technology, FMCG and healthcare stocks erased more than half of the gains in second half of trade. The key benchmark indices closed higher for the ninth session in a row, with rising for more than 1200 points. The rally was aided by consistent inflow of foreign money that lifted the rupee to 54 against the US dollar, a third quantitative easing by the Federal Reserve, favorable German's Constitutional court ruling, diesel price hike and FDIs approval in retail, aviation & broadcast carriage services sectors. The broader markets too traded on a positive note. The BSE Midcap index rose by 1.14%, while the BSE Smallcap index was up by 1.13% in trade today. The overall market breadth stood positive. The Sensex ended at 18542.31, up by 78.04 points, while the Nifty shut shop at 5610, up by 32.35 points. Major Events: The RBI announced a reduction in CRR by 25bps and kept the repo rate unchanged at 8% and reverse repo rate remains unchanged at 7% under the liquidity adjustment facility (LAF). Following are the stocks/ sectors which were in news today: 1. Tata Motors trimmed gains to 2.7% from over 6% in late trade, after posting less-than-expected global sales data in August. 2. Real estate firms rose on hopes of benefit from the government's move to allow foreign direct investment in multi-brand retail chains. 3. Welspun Corp gained after the company said it has successfully concluded the placement of Rs252.8 crore secured redeemable non convertible debentures. The stock rose 0.40% in trade today 4. Deccan Chronicle Holdings locked lower circuit of 5%, ahead of the Bombay High Court (HC) verdict on the Board of Control for Cricket in India (BCCI) decision to terminate the contract with IPL team Deccan Chargers. Market sentiment: The market breadth stood in favor of advances. Of the 3007 stocks traded on the BSE, 1628 (54.14%) rose, 1262 (41.97%) fell and 117 (3.89%) stocks remained unchanged. Sectoral & stock screening: Among the 13 sectoral indices, nine sectors closed in green zone while remaining four sectors closed in red zone. Top Gainers: BSE Realty rose by 6.21%, BSE CG surged by 3.74%, BSE Bankex gained 3.24%. Top Losers: BSE FMCG down by 3.66%, BSE IT down by 3.18%, BSE TECk slipped by 1.86%. Among 'A' group stocks, top three gainers were- Pantaloon Retail rose by 19.04%, HDIL up by 13.58% and GMR Infra surged by 12.32%. Top three losers were- Hexaware Tech declined by 5.94%, IPCA Lab down by 5.60% and ITC fell by 5.48%. Global signals: Asian stock markets posted muted gains on Monday as the boost faded from the Federal Reserve's announcement last week of new measures to energize the U.S. economy. While investors were still in the mood to take on more risk, the risk of profit taking has grown given the pace and magnitude of recent moves. European stocks and the euro both eased today, beginning a new week in cautious fashion after the prospect of fresh U.S. economic stimulus propelled both to multi-month highs in the previous session. US stock index futures headed towards a weaker opening at the Wall Street on Monday. Market Outlook: Data to be released in the US on Monday is Empire State Manufacturing Survey.