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Markets up 0.5%; RBI policy awaited

Markets up 0.5%; RBI policy awaited
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First Published: Tue, Jan 25 2011. 09 54 AM IST
Updated: Tue, Jan 25 2011. 09 54 AM IST
Mumbai: Shares took cues from Asian markets and were trading up 0.5% on Tuesday, ahead of a widely expected rate increase by the Reserve Bank of India (RBI) in its review at 11:30 am.
Financials were mixed. State Bank of India and ICICI Bank shed 0.4% and 0.2% respectively, while HDFC Bank gained 0.4%.
The RBI said on Monday inflation may stay high for longer than anticipated earlier due to a rise in global commodities prices and domestic supply side pressures that have recently pushed up food prices.
The central bank is expected to raise rates by at least 25 basis points.
By 9:53 am, the 30-share BSE index was trading up 0.52% at 19,250.59, with 24 of its components gaining.
“Lets see what RBI has to say. A rate hike is more or less expected, the comments are to be watched for,” said Sunder Subramaniam, senior manager of institutional sales at brokerage Sharekhan.
He said there could be a positive surprise if the RBI lowered the statutory limit that banks are required to hold in government bonds, a move that will release more bank deposits for loans.
The BSE index is down more than 6% in January, with foreign funds withdrawing around $892 million from stocks.
Energy major Reliance Industries rose 1.1%, recovering from a recent decline. The stock is still down 7.2% so far this month.
Non-ferrous metals producer Sterlite Industries and top consumer goods maker Hindustan Unilever were up 2.5% and 0.5% respectively ahead of their quarterly earnings announcement.
In the broader market, gainers were around thrice the number of losers on volume of 29.6 million shares.
The 50-share NSE index was up 0.5% at 5,769.80.
The MSCI’s measure of Asian markets other than Japan rose 0.6%, while Japan’s Nikkei was trading 1.2% higher.
Indian markets will be closed on Wednesday for a public holiday.
Stocks on the move
Larsen & Toubro was up 1.5% at Rs1,687.70 after the top engineering and construction firm said it had signed a joint venture with Kobe Steel for tyre and rubber industry equipment.
Idea Cellular rose 3.5% to Rs71.70 after the sixth-largest mobile carrier posted a higher-than-expected 43% rise in quarterly net profit.
SKS Microfinance, India’s largest and only listed microfinance lender, was down 3.7% at Rs658.70, after it posted a 38% drop in net profit for the December quarter.
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First Published: Tue, Jan 25 2011. 09 54 AM IST
More Topics: Markets | Stock market | RBI | SBI | Monetary review |