Realty, bank, auto stocks gain on rate cut hopes
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Realty, bank, auto stocks gain on rate cut hopes

Last Updated: Wednesday, May 15, 2013, 19:28
 
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Realty, bank, auto stocks gain on rate cut hopes
Mumbai: Interest-rate sensitive bank, realty and auto stocks emerged as the day's star performers, notching up gains in the 3-8 percent range, amid hopes of a rate cut by RBI following inflation dropping to over three-year lows.

From the realty space, shares of Anant Raj surged by 8.13 percent, followed by Unitech (6.19 percent), Indiabulls Real Estate (5.89 percent), DLF (4.93 percent) and Parsvnath Developers (2.75 percent).

Led by the gains in these stocks, Realty index settled at 1,956.35, up 4.04 percent. It was the top gainer among 13 sectoral indices, all of which ended in positive zone.

Among banking stocks, PNB zoomed by 7.49 percent, followed by Union Bank (5.39 percent), SBI (4.07 percent), ICICI Bank (3.80 percent), HDFC Bank (3.72 percent). Following the gains, the BSE Banking index rose by 3.95 percent to 14,962.99.

"Rate-sensitive sectors like banking, auto and realty were seen soaring high post inflation figures announced yesterday," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Limited.

Inflation, based on WPI, fell to over three year low of 4.89 percent in April, giving RBI space to further ease interest rates.

Declining for the third straight month, inflation has returned to the comfort zone of the Reserve Bank for the first time since November 2009, when it was 4.78 percent.

"With April WPI inflation dropping to a 41-month low of 4.89 percent, it gives RBI plenty of room to slash interest rates in its upcoming policy meet," said Amar Ambani, Head of Research, India Infoline Limited.

The RBI is scheduled to announce its mid-quarter policy review on June 17.

Auto stocks also saw buying, with Mahindra & Mahindra climbing 3.60 percent, Tata Motors moved up by 2.63 percent. Bajaj Auto (2.14 percent) and Maruti Suzuki (2.07 percent) also saw good gains. Auto index ended the day 2.29 percent higher at 11,267.93.

In the stock market, the BSE benchmark Sensex ended the day with a gain of 490.67 points at 20,212.96.

PTI


First Published: Wednesday, May 15, 2013, 19:28


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