Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

RBI policy boosts bank stocks
Tue, 29 Oct Closing

Indian equity markets began the day's proceedings on a cautious note. But post the monetary policy of the RBI, buying activity across index heavyweights intensified causing the indices to scale higher. This momentum was maintained in the final trading hour as well and the indices closed well above the dotted line. While the BSE-Sensex today closed higher by 359 points, the NSE-Nifty closed higher by 120 points. The BSE Small Cap and the BSE Mid Cap also did well and gained around 1% each. Gains were largely seen in banking, metals and auto stocks.

As regards global markets, Asian indices closed mixed today while most European indices have opened in the green. The rupee was trading at Rs 61.39 to the dollar at the time of writing.

The Reserve Bank of India (RBI) hiked the repo rate yet again by 25 bps to 7.75% in its second quarter review of monetary policy for FY14. The repo rate is the rate at which the central bank lends money to commercial banks. Further, it left the cash reserve ratio (CRR) unchanged at 4%.

The hike is in line with the central bank's hawkish stance given high levels of both wholesale and consumer price inflation. But few things did bring respite. The initial signs of recovery and stability have been witnessed in the foreign exchange market. Steps towards curtailing current account deficit are gradually yielding results. This enabled RBI to roll back the tightening measures and enhance liquidity into the system. Hence, the MSF rate was cut down to 8.75%. With these measures, the MSF rate and the bank rate now stand recalibrated to 100 bps above the repo rate.

Most pharma stocks closed firm today with the key gainers being Biocon, Sun Pharma and Cipla. As per a leading business daily, Sun Pharma appears to have addressed the issues raised by the US FDA with respect to Caraco's manufacturing facility. It must be noted that trouble brewed at Caraco's Michigan facility in 2009 when the US FDA declared that it flouted good manufacturing practices (GMP) norms. Accordingly, in that year, Caraco entered into a consent decree with the regulator. After corrective measures were put in place, in 2012, the US FDA notified that Caraco could resume manufacturing operations at the plant. Some minor observations were made by the FDA since then. But Caraco appears to have addressed the same. This is a positive for Sun Pharma whose US revenues came under pressure when Caraco first courted trouble with the US FDA.

The US regulator in recent times has become quite stringent with respect to GMP norms followed by generic companies. Most of the domestic pharma companies have come under the US FDA scanner. While some have been able to resolve their issues speedily, others such as Ranbaxy have faced much more serious issues. What is more, the regulator has also begun to conduct surprise checks on plants. This means that domestic pharma companies will have to step up efforts to make sure their plants are compliant so that business does not get hampered going forward.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

What else is happening in the markets today? Dig in...

Equitymaster requests your view! Post a comment on "RBI policy boosts bank stocks". Click here!


Related Views on News

SBI Announces Quarterly Results (3QFY21); Net Profit Down 6.9% (Quarterly Result Update)

Feb 5, 2021 | Updated on Feb 5, 2021

For the quarter ended December 2020, SBI has posted a net profit of Rs 52 bn (down 6.9% YoY). Sales on the other hand came in at Rs 667 bn (down 1.4% YoY). Read on for a complete analysis of SBI's quarterly results.

SBI Announces Quarterly Results (2QFY21); Net Profit Up 51.9% (Quarterly Result Update)

Nov 6, 2020 | Updated on Nov 6, 2020

For the quarter ended September 2020, SBI has posted a net profit of Rs 46 bn (up 51.9% YoY). Sales on the other hand came in at Rs 668 bn (up 3.9% YoY). Read on for a complete analysis of SBI's quarterly results.

Bandhan Bank Q4 Profit Dips as Provisions Spike: What Should Investors Do? (Views On News)

May 10, 2021

Here's a rundown on the latest quarterly results of Bandhan Bank.

IDFC First Bank Profitable Again; Posts Rs 4.5 bn Net Profit (Views On News)

May 10, 2021

Here's how the bank turned a profit after posting a loss of Rs 28.6 bn in FY20.

IDBI Bank Gets Strategic Divestment Approval. What's Next? (Views On News)

May 6, 2021

Key points investors should know about IDBI Bank's strategic divestment approval.

More Views on News

Most Popular

Is Intraday Trading For You? (Fast Profits Daily)

May 13, 2021

Do you think you have what it takes to be an intraday trader? Find out in this video.

My Secret to Find Breakthrough Stocks (Fast Profits Daily)

May 7, 2021

I've used this trading technique for many years with great success. I'm sharing it with you today.

Are the Stock Markets Deaf to Covid Agony? (Profit Hunter)

May 6, 2021

Why are markets discounting the economic impact of Covid?

The Key to Profit from India's EV Revolution (Profit Hunter)

May 7, 2021

Stocks you must consider investing in before buying your first electric vehicle.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms