The Hindu Business Line : Sensex rebounds after sharp fall

Mumbai, July 31 The stock market brushed aside hike in cash reserve ratio for banks, preferring to take cues from broader global market trends to post nearly a two per cent gain.

The Bombay Stock Exchange’s Benchmark index rose 290 points or 1.90 per cent to close at 15,550.99.

The markets fell sharply to a low of 15,224.82 intra-day, in reaction to the CRR hike but recovered to close higher as the Credit Policy was seen as having some positives for the banking sector. The banking index closed 1.16 per cent up at 8,148.68.

“In the short term, it may be seen as a negative for banks as Rs 16,000 crore liquidity has been sucked out of the system. Profits of banks may get affected for the next couple of quarters, but the core growth is very high and even if stocks get affected, they will bounce back in a couple of days,” said Mr Lalit Thakker, Director-Research, Angel Broking.

The rally on the bourses today was led by capital goods and metal stocks.

The capital goods index rose almost 5 per cent to 13,321.78, while the metal index rose 2.19 per cent to 11,630.92.

The broad based S&P CNX Nifty also gained to close higher by 2 per cent at 4528.85.

“World markets recovered today, with most markets recovering half of what they had lost.

“There was a little bit of recovery in the Indian markets as well, as a result of which new investors came in,” said Mr Vijay Kedia, MD, Kedia Securities.

Top gainers on the Sensex today were L&T (6.58 per cent), HDFC (5.65 per cent) and BHEL (5.33 per cent).

More Stories on : Credit Policy | Stock Markets

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page