Markets surge on Reserve Bank of India’s growth focus

Benchmark share indices ended at their 10-week closing highs on Tuesday, after the Reserve Bank of India’s decision to boost liquidity by lowering the cash reserve ratio would help revive growth.

The RBI in the third quarter review of Monetary Policy cut the Cash Reserve Ratio (CRR) by 50 bps to 5.5%.

CRR cut will infuse Rs 32,000 crore into the system.

However, repo and reverse repo have been kept unchanged at 8.5% and 7.5%, respectively.

RBI has kept Inflating forecast unchanged at 7%. GDP forecast has been brought down to 7% from 7.6% earlier.

The 30-share Sensex ended at 16,996 up 244 points or 1.46% and the 50-share Nifty ended at 5,127 up by 81 points or 1.6%.

The Sensex and the Nifty reached an intra-day high of 17,050 levels and 5,141 mark, respectively.

On November 14, 2011, the Sensex had ended at 17118.74 and the Nifty at 5,148.35.

On the global front, Japan’s Nikkei ended marginally higher on hopes that a Greek debt deal may still be salvaged.

Meanwhile, the European markets were trading lower.

France’s CAC, Germany’s DAX and Britain’s FTSE fell by nearly 0.5% each.

Back home, BSE Bankex surged by 3% post the Reserve Bank of India’s move to cut the cash reserve ratio by 50 bps. SBI, ICICI Bank, HDFC surged between 1-5%.

From: Business Standard