Banking and Realty Stocks Surge Post RBI Rate Announcement

The Bombay Stock Exchange witnessed a significant gain in rate-sensitive stocks like banking and realty after the Reserve Bank of India announced its mid-quarter review of monetary policy, keeping interest rates unchanged. The BSE banking index surged 236.23 points, or 1.86 percent, to settle at 12,958.88 points, with State Bank of India, HDFC, and ICICI Bank leading the gains. Realty stocks, including DLF and Unitech, also rose significantly.

Key Takeaways:

• The BSE banking index surged 236.23 points, or 1.86 percent, to settle at 12,958.88 points, led by gains in State Bank of India, HDFC, and ICICI Bank.
• State Bank of India surged 2.44 percent to Rs 2,761.85, while ICICI Bank rose 2.44 percent and HDFC Bank climbed 1.80 percent.
• The BSE realty index rose 26.97 points, or 0.98 percent, to end at 2,771.70, with DLF rising 1.56 percent and Unitech rising 1.21 percent.
• RBI maintained short-term lending and borrowing rates at 6.25 percent and 5.25 percent, respectively, and the mandatory cash reverse ratio at 6 percent.
• Marketmen believed the move would help inject liquidity into the system and aid the corporate sector.
• Unicon Financial CEO Gajendra Nagpal stated, "Keeping the rates unchanged is maintenance of the status-quo. On its implications on the broader market I think business will be as usual on the street."
• The benchmark index Sensex rose 217 points to 19,864.85 points, driven by fag-end buying in financial stocks.

Statistics:

• BSE banking index surge of 236.23 points, or 1.86 percent.
• State Bank of India's price rise of 2.44 percent to Rs 2,761.85.
• ICICI Bank's price rise of 2.44 percent.
• HDFC Bank's price rise of 1.80 percent.
• BSE realty index rise of 26.97 points, or 0.98 percent.
• DLF's price rise of 1.56 percent.
• Unitech's price rise of 1.21 percent.

Sources:

• PTI, December 16, 2010.
• PTI SUM MR 12161707.