Sensex regains 20k level, surges 240 pts after RBI further cuts short-term rates

Oct 08 2013, 11:48 IST
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Bank stocks, especially those more dependant on short-term funding, surges after RBI's rate-cut action. Bank stocks, especially those more dependant on short-term funding, surges after RBI's rate-cut action.
SummaryYes Bank Ltd surges 7.3 per cent while Axis Bank Ltd gains 3.5 per cent.

The BSE benchmark Sensex today regained psychological 20,000 mark by soaring 240 points in opening trade as banking stocks led rally after the Reserve Bank reduced the marginal standing facility rate to improve liquidity in the system.

The 30-share index, which had lost nearly 21 points in yesterday's trade, gained 239.62 points, or 1.20 per cent, to trade at 20,134.72 with all sectoral indices trading in the positive zone rising up to 3.59 per cent.

The wide-based National Stock Exchange index Nifty rose by 63.35 points, or 1.07 per cent, to trade at 5,969.50.

Brokers said sentiments turned buoyant after RBI yesterday cut the marginal standing facility (MSF) rate, at which it lends emergency funds to banks, by 0.5 per cent to 9 per cent with an aim to improve liquidity and boost economic activities.

The banking index gained the most by rising 3.59 per cent to 11,887.47 with all the 13 constituents, led by Yes Bank and SBI, rising up to 8.10 per cent.

(Reuters)

BSE Sensex rises nearly 1 per cent each after the Reserve Bank of India cut an overnight interest rate on Monday, further unwinding extraordinary measures taken to defend the rupee as pressure on the embattled currency eases.

The NSE index and the BSE index rise 0.8 per cent each.

Bank stocks, especially those more dependant on short-term funding, surged after RBI's rate-cut action.

Yes Bank surges 7.3 per cent while Axis Bank gains 3.5 per cent. Among non-banking financial companies, IDFC Ltd is up 2.2 per cent while Housing Development Finance Corporation Ltd (HDFC) gains 1.4 per cent.

In the Asian region, Hong Kong's Hang Seng index rose by 0.34 per cent, while Japan's Nikkei was down marginally by 0.07 per cent in early trade.

The US Dow Jones Industrial Average ended 0.90 per cent lower yesterday.

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