Sensex closes at two-month high, thanks to credit policy

3.30 p.m: A CRR cut announced by the central bank led to a sharp run in banking stocks. SBI closed 5.25 percent higher at Rs 2042.55, ICICI Bank closed the day at Rs 886.15 up 3.30 percent while Axis Bank closed the day at Rs 1021 up 2.41.

Public sector banks saw an even bigger move with Canara Bank rising by 10.10 percent, Orient Bank closing 6.16 percent higher while Bank of India too closed around 6.10 percent up.

As a result of the move in banking stocks indices closed at their two month high. BSE Sensex closed 244 points, while Nifty closed at 5127 up 81 points.

Infrastructure companies also joined the rally with L&T closing the day 6 percent higher at Rs 1,354 and IVRCL Infra closing 10.82 percent higher at Rs 50.20 while IDFC closing 5.53 percent higher at Rs 125.90. Infrastructure companies tend to benefit in a lower interest rate scenario, which is what the market has discounted frin the credit policy.

However, bond markets have moved on the other direction with yields rising to 8.33 percent against 8.12 percent before announcement of the policy.

Among the other stocks are Essar Oil closed 15 percent higher at Rs 61.85 after the company said that its gas reserves has increased.

Strides Arcolab closed 17 percent higher at Rs 478.30 on news of the company selling its Australian generic division.

Equity markets surge on rate cut, but bonds stay glum

2.30 p.m: Markets continue to trade high with Sensex at 17,028 gaining at 276 while Nifty is at 5136 up 90 points.

Banking stocks are trading higher with SBI leading the pack with a gain of 5.33 percent at Rs 2044.85, ICICI Bank gaining 4 percent at Rs 891.20 whileAxis Bank has also gained by 4 percent at Rs 1037.

Bond markets have continued to move higher, not reflecting the optimism of the equity markets. Bond yields have moved higher to 8.20 percent from 8.12 percent it was trading just before the announcement of credit policy.

Infrastructure companies continue to trade higher with L&T trading at Rs 1,353 up 6 percent, IVRCL Infra trading 10 percent higher at Rs 50.10 while infrastructure finance company IDFC is trading 5 percent higher at Rs 125.25.

Reliance has moved higher and presently trades at Rs 787.70 up 2 percent.

Equity markets surge on rate cut, but bonds stay glum

1.15 p.m: Banking stocks continue to move higher with SBI trading at Rs 2056, a gain of 6 percent, while ICICI Bank trades at Rs 887.40 up 3.6 percent while Axis Bank is up 3.4 percent at Rs 1030.

Public sector banks have moved higher with Canara Bank gaining 7.58 percent, Oriental Bank is up by 7.30 percent and Bank of India gaining 6.5 percent.

The optimism of equity market is not reflected in the bond markets, where bond yield moving higher to 8.18 percent from 8.12 percent just before announcement of the policy.

Infrastructure major L&T trades 5.67 percent higher at Rs 1349 while infrastructure financier IDFC trades 5.28 percent higher at Rs 125.75.

Sensex meanwhile trades at 17,044 up 292 points while Nifty trades 92 points higher at 5138.

Strides Arcolab gains 15% after selling generic business

12.30 p.m: Markets continue to move higher post announcement of credit policy. Sensex trades at 17,018 up 265 points while Nifty trades at 5128 up 82 points.

Banking stocks continue to trade higher with SBI trading at Rs 2023, a gain of 4.28 percent followed by ICICI Bank which is up 3.59 percent at Rs 887.20 while Axis Bank is up 2.42 percent to Rs 1020.

Strides Arcolab trades 15 percent higher at Rs 470 after the company decided to sell its generic business. The company was looking at selling the division to ease off its debt burden. around 35 percent of the company’s operating profit was eaten away by interest.

Sbi gains 4% post credit policy, Sensex up 290 pts

11.30 a.m: Markets are trading at the day’s high after the central banker decided to infuse liquidity clearly signalling the topping of interest rate and the shift from inflation control to growth.

Sensex trades 245 points higher at 16,996 while Nifty is at at 5123 up 77 points.

Rupee has fallen below the 50 mark and presently trades at 49.97 against the dollar.

Bank Nifty trades 2.5 percent higher at 9775.

Among stocks SBI is up 4.40 percent at 2021, ICICI Bank is up 3.4 percent at Rs 885.40 while Axis Bank is up 2.70 percent at Rs 1023.

L&T has moved up 4 percent higher at Rs 1331.

CRR cut by 50 bps, banking index at day’s high

11.00 a.m: Banking stocks have led an overall recovery in the market. SBI trades 1.6 percent higher at Rs 1970, ICICI Bank trades 1.5 percent higher at Rs 869.70 while Axis Bank trades at Rs 1009.60 up 1.2 percent.

Sensex meanwhile trades at 16,872 up 112 points while Nifty trades at 5084, down 32 points.

Though the central bank has reduced CRR (cash reserve ratio) it has left rates unchanged. However, the speech by the governor continues to remain hawkish and highlights the sticky nature of inflation and the precarious fiscal deficit and global scenario.

Bond markets yields has moved up from 8.12 percent to 8.14 percent.

More than the banks, infrastructure stocks are trading higher as the CRR cut signal the peaking of interest cycle. L&T trades 3 percent higher at Rs 1315.

Similarly housing finance companies like LIC Housing Finance and HDFC are moving higher. LIC Housing trades at Rs 246, up 1.93 percent while HDFC trades at Rs 704 up 1.22 percent.

Banking stocks in focus ahead of credit policy

9.30 am: Indian markets have opened marginally higher, with the BSE Sensex trading at 16,800, up 52 points, while Nifty trades at 5,060, up 16 points.

Relianceis witnessing good buying and presently trades 1.5 percent higher at Rs 783.10, after a marginal fall on Monday, post its results announcement.

Banking stocks are trading slightly higher ahead of the credit policy. ICICI Bank trades at Rs 865, up by 1 percent, Axis Bank is at Rs 1,004, up 0.72 percent, while SBI trades at Rs 1,950, up 0.54 percent. Though the general consensus is that the central banker will leave both the CRR and repo rates unchanged, the recent move in banking stocks suggest that market have discounted a 50 basis point cut in CRR.

Maruti trades 1.5 percent lower after the company announced a better-than-expected results on Monday. The stock jumped after the results were announced.

L&T trades 1.39 percent higher at Rs 1,295.45; the company also announced better- than-expected results on Monday.

Sterlite trades 2 percent lower at Rs 105.55, after the company announced a drop in profit.

Idea Cellular trades 3 percent higher at Rs 89.90 as the company’s number were much better than market expectations. Bharti Airtel has also moved 1.15 percent higher to Rs 356.30 as expectations from the company have increased post-results.