Market rebounds as RBI springs no surprises
The Sensex, which had slipped sharply into the red, recovered smartly after the announcement of credit policy. The Reserve Bank of India on Wednesday hiked repo rates by 25 basis points to 7.50%, while keeping reverse repo and bank rates unchanged at 6%. The central bank also kept the cash reserve ratio steady at 5.50%.
The RBI said its monetary stance would be to ensure price stability and anchor inflation expectations. It will respond swiftly to evolving global and domestic situations impacting inflation as well as growth. Liquidity management will be a priority in the remaining part of the year. The central bank said it will use all instruments at its disposal to regulate liquidity.
The government on Wednesday revised upwards its 2005/06 gross domestic product growth estimate to 9% from an earlier 8.4%. Manufacturing output growth was revised to 9.1% for the year to March 2006, from the earlier 9%. Growth in farm output for 2005/06 was pegged at 6% compared to an earlier estimate of 3.9%.
At 12:29 IST the BSE Sensex was up 19.43 points, at 14,231.39. It had opened higher, at 14,219.38, and surged to a high of 14,269.31. The benchmark index had also slipped to a low of 14,116.02.The total turnover on BSE amounted to Rs 2504 crore.
RBI's policy review over, banks flourish
Bank stocks moved into positive terrain soon after the RBI announced a 25 basis points hike in the repo rate.
Bank of Baroda was up 4% to Rs 258, up from an early low of Rs 243 just before the announcement. Punjab National Bank was up 2.4% to Rs 517.50, up from an early low of Rs 492. Oriental Bank of Commerce was up 2.2% to Rs 220.75, up from the early low of Rs 215. State Bank of India was up 1% to Rs 1168, up from a low of Rs 1133.
Bank stocks have shown a mixed trend over the past few days. While State Bank of India (SBI) drifted lower due to disappointing December 2006 results, Bank of Baroda (BoB) rallied post a robust Q3 outcome. Canara Bank also had lost ground after reporting flat Q3 numbers.
RBI today raised the repo rate by 25 basis points to 7.5%. However, the central bank chose to keep the reverse repo and bank rates unchanged at 6%. The cash reserve ratio (CRR) also remains steady at 5.5%.
The RBI said the rate of bank credit growth is "clearly excessive." The bank credit has been growing at a robust 30%.
The central bank said its monetary stance would be to ensure price stability and anchor inflation expectations. The RBI said its objective is to bring inflation as close as possible to 5.0-5.5% as soon as possible. RBI will respond swiftly to evolving global, domestic situation impacting inflation and growth, a statement by Governor Y V Reddy says.
The central bank said liquidity management will be given top priority in the remaining part of the year. It said it would use all policy instruments at its disposal to regulate money supply.
Government bond prices rose and the rupee was steady after the monetary policy review was announced at 12:00 IST.
The RBI said its monetary stance would be to ensure price stability and anchor inflation expectations. It will respond swiftly to evolving global and domestic situations impacting inflation as well as growth. Liquidity management will be a priority in the remaining part of the year. The central bank said it will use all instruments at its disposal to regulate liquidity.
The government on Wednesday revised upwards its 2005/06 gross domestic product growth estimate to 9% from an earlier 8.4%. Manufacturing output growth was revised to 9.1% for the year to March 2006, from the earlier 9%. Growth in farm output for 2005/06 was pegged at 6% compared to an earlier estimate of 3.9%.
At 12:29 IST the BSE Sensex was up 19.43 points, at 14,231.39. It had opened higher, at 14,219.38, and surged to a high of 14,269.31. The benchmark index had also slipped to a low of 14,116.02.The total turnover on BSE amounted to Rs 2504 crore.
RBI's policy review over, banks flourish
Bank stocks moved into positive terrain soon after the RBI announced a 25 basis points hike in the repo rate.
Bank of Baroda was up 4% to Rs 258, up from an early low of Rs 243 just before the announcement. Punjab National Bank was up 2.4% to Rs 517.50, up from an early low of Rs 492. Oriental Bank of Commerce was up 2.2% to Rs 220.75, up from the early low of Rs 215. State Bank of India was up 1% to Rs 1168, up from a low of Rs 1133.
Bank stocks have shown a mixed trend over the past few days. While State Bank of India (SBI) drifted lower due to disappointing December 2006 results, Bank of Baroda (BoB) rallied post a robust Q3 outcome. Canara Bank also had lost ground after reporting flat Q3 numbers.
RBI today raised the repo rate by 25 basis points to 7.5%. However, the central bank chose to keep the reverse repo and bank rates unchanged at 6%. The cash reserve ratio (CRR) also remains steady at 5.5%.
The RBI said the rate of bank credit growth is "clearly excessive." The bank credit has been growing at a robust 30%.
The central bank said its monetary stance would be to ensure price stability and anchor inflation expectations. The RBI said its objective is to bring inflation as close as possible to 5.0-5.5% as soon as possible. RBI will respond swiftly to evolving global, domestic situation impacting inflation and growth, a statement by Governor Y V Reddy says.
The central bank said liquidity management will be given top priority in the remaining part of the year. It said it would use all policy instruments at its disposal to regulate money supply.
Government bond prices rose and the rupee was steady after the monetary policy review was announced at 12:00 IST.
posted by SY at 1:26 PM
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