Banks, real estate, auto stocks rally ahead of RBI policy
BSE Auto Index was trading 0.7 per cent higher, led by gains in Ashok Leyland which was up 1.3 pc, and Bajaj Auto which rose 1.6 pc.
Although, the recent economic indicators have given mixed signals but markets have factored in a minimum cut of 25 bps cut in interest rates in today’s policy outcome.
Most brokerages are of the view that the Reserve Bank of India will cut repo rate by 25 basis points in its last mid-quarter review of monetary policy for fiscal 2013.
Markets may get a boost if RBI, in order to ease liquidity situation, reduces the cash reserve ratio by 25 bps too.
At 09:30 am, BSE Banking Index was trading 0.5 per cent higher, led by gains in ICICI Bank which was up 1.1 per cent, followed by the State Bank of India, which rose 0.5 per cent and the Axis Bank was up 0.3 per cent.
BSE Auto Index was trading 0.7 per cent higher, led by gains in Ashok Leyland which was up 1.3 per cent, followed by Bajaj Auto which rose 1.6 per cent and Maruti Suzuki was trading 1.1 per cent higher.
BSE Realty Index was trading 0.8 per cent higher, led by gains in Anant Raj Industries, which was up 2.6 per cent; DLF, which rose 0.9 per cent and Godrej Properties, was trading 1.1 per cent higher.
"It looks like the market has already factored in a rate cut of 25 bps. Post the announcement, rate cyclicals will get a boost if RBI delivers on the rate cut," Saurabh Mukherjee, head of equities at Ambit Capital said in an interview with ET Now.
"Market will also watch out for CRR cut in the policy," he added.