Post Session: D-street gives thumbs-up to RBI move; Sensex surges over 300 pts Analysis for Jul 16, 2014

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Extending gains for second day, the Indian benchmark indices surged on Wednesday as rate-sensitive financial and realty stocks, led by ICICI Bank, Axis Bank, Unitech and DLF, after RBI exempted long term bonds from mandatory regulatory norms like CRR and SLR if the money raised is used for funding of such projects. Investors reacted positively to the RBI announcement as the move will boost infrastructure development and affordable housing.

The BSE SENSEX closed at 25549.72 up by 321.07 points or by 1.27 per cent, while the NSE Nifty ended at 7624.4 up by 97.75 points or by 1.3 per cent.

During the day"s trade, the BSE Sensex touched intraday high of 25602.78 and intraday low of 25246.75, while the NSE Nifty touched intraday high of 7640.1 and intraday low of 7532.45.

Banks can issue long-term bonds with a minimum maturity of seven years to raise resources for lending to (i) long term projects in infrastructure sub-sectors, and (ii) affordable housing," the Reserve Bank said in a statement. The central bank said it intends to "ease the way for banks to raise long term resources to finance their long term loans to infrastructure as well as affordable housing".

On the global front, Asian markets ended mixed on Wednesday after China reported economic growth in line with market expectations, signaling that world"s second largest economy is recovering with decent pace. China's GDP grows by 2 per cent in the second quarter from the previous quarter, taking annual growth to 7.5 per cent. Despite the development, China"s Shanghai Composite ended lower, continuing its losing streak for four day, as investors shrugged off the announcement. Among others, Japan's Nikkei fell on Wednesday in lackluster session as investors booked profits.

Outperforming the benchmark indices, the broader market ended higher. The BSE MIDCAP closed at 9165.92 up by 121 points or by 1.34 per cent, while the BSE SMLCAP closed at 10057.37 up by 201.37 points or by 2.04 per cent.

On the Sectoral front, realty and banking indices gained 4.28 per cent and 2.5 per cent, respectively.

The Market breadth, indicating the overall health of the market, was strong. On BSE out of total shares traded 3182, shares advanced were 2062 while 1004 shares declined and 116 were unchanged.

The top gainers of the BSE Sensex pack were ICICI Bank Ltd. (Rs. 1459.05,+4.70%), Hindalco Industries Ltd. (Rs. 181.65,+4.19%), Axis Bank Ltd. (Rs. 1965.25,+3.57%), Tata Steel Ltd. (Rs. 542.70,+3.13%), Sesa Sterlite Ltd. (Rs. 296.65,+2.97%), among others.

On the flip side, GAIL (India) Ltd. (Rs. 457.10,-0.96%), Bajaj Auto Ltd. (Rs. 2140.25,-0.85%), Wipro Ltd. (Rs. 535.45,-0.34%), Cipla Ltd. (Rs. 431.80,-0.27%), Dr. Reddy's Laboratories Ltd. (Rs. 2635.05,-0.21%), were among notable losers on BSE.

Story first published: Wednesday, July 16, 2014, 17:36 [IST]
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