New Delhi, India (BBN)-The stock markets extended Monday’s rally and gained a further 200 points on Wednesday, boosted by the Reserve Bank of India’s surprise 50 basis points cut in repo rate, which was followed by several banks announcing a cut in their base rates.
At 9:50hrs, the BSE Sensex was up 188.71 points at 25,967.37 and the wider NSE Nifty gained 47.35 points at 7,890.65. The Sensex and Nifty had closed up 161.8 and 47.6 points respectively on Tuesday, reports the Hindustan Times.
The Reserve Bank of India (RBI) on Tuesday cut its key lending rate–the repo rate–by 0.50 percentage points to 6.75 per cent, setting the stage for lower loan rates for consumers ahead of the festival season and cheaper bank capital for companies to aid investment. India’s largest lender SBI slashed its lending rate by 0.40 per cent within a couple of hours of RBI rate cut.
The largest private sector lender ICICI Bank also hinted at cutting its base rate by at least 0.25 per cent.
Equity brokers said sentiments turned buoyant after the RBI rate cut, triggering buying activity.
Metal stocks like Tata Steel and Hindalco, which had seen heavy selling amid the global commodity price pressures on Tuesday, were the top gainers on Wednesday morning, seeing some buying action at lower levels.
Tata Steel was up 3.4 per cent and Hindlco rose 2.7 per cent.
Other gainers included ITC, Coal India, Hindustan Unilever, BHEL and Bharti Airtel, which were all up around 2 per cent.
Among banking stocks, State Bank of India and ICICI Bank were trading up about 0.5 per cent.
Most Asian markets were also trading in the green. Japan’s Nikkei index was up 2.50 per cent, Hong Kong’s Hang Seng gained 1.4 per cent, Korean Kospi rose 0.4 per cent and the Shanghai Composite Index was up 0.7 per cent.
Overnight US stocks also ended higher, with the Dow Jones Industrial Average closing up 0.3 per cent.