Sensex recovers 90 points as RBI cuts policy rates by 0.25%
Mumbai: The BSE benchmark Sensex rose by over 90 points in mid-session trade Tuesday after the Reserve Bank of India cut short-term leading rate to boost economic growth.
The 30-share index, which opened in negative zone, recovered by 90.27 points, or 0.45 percent, to trade at 20,193.62 soon after RBI announced cut in short-term lending rate by 0.25 percent to 7.75 per cent and Cash Reserve Ratio (CRR) by similar margin to 4 percent.
Similarly, the National Stock Exchange Nifty index traded above 6,100 points level by rising 31.05 points, or 0.51 percent, to 6,105.85 points.
Brokers said a cut in short-term lending rate by 0.25 percent to 7.75 percent after a gap of nine months, and reducing Cash Reserve Ratio (CRR) by 0.25 percent to 4 percent by the Reserve Bank brought cheer to the market as the move would reduce the cost of home, auto and corporate loans and improve liquidity in the market.
The upsurge was mostly led by interest-rate sensitive stocks such as banking, realty and auto.
Realty major DLF was trading higher by 1.03 percent at Rs 269.70, while largest state-run, State Bank of India gained 1.12 percent to trade at Rs 2,518. Private lender ICICI Bank rose by 1.34 percent to Rs 1,206.50.
Among the sectoral indices, the BSE realty index gained the most by rising 1.55 percent to 2,258.27 points followed by Banking index, which gained 1.22 percent at 14,842.68 points.