Market cheers RBI's move, Nifty above 5100

MUMBAI (Makemystocks): Indian stock markets ended with smart gains after the Reserve Bank of India's declared its decision to boost liquidity by lowering the CRR and keeping policy rates unchanged to monitor inflation and strengthen growth. Nifty advanced by 1.61% and closed above 5100.

RBI cut the CRR by 50 basis points to 5.5%.The CRR cut is effective from the fortnight beginning January 28, 2012. The RBI kept the repo rate and Reverse repo unchanged at 8.5 % and 7.5 % respectively. CRR cut will increase Rs 32,000 crore liquidity.

The S&P CNX Nifty opened at 5065 and after making low of 5049 straight rise was sen and Nifty touched the high of 5141. Nifty settled at 5127 up by 81 points.

Today’s rise in stock markets was majorly due to rise in banking stocks. Bank Nifty rose by 3.3%. Reserve Bank of India (RBI) took the half way route by keeping key policy rates (Repo and Reverse Repo) unchanged. There is no immediate respite to home, auto and corporate loan borrowers in terms of their monthly equated installments (EMIs) but with the RBI reducing the cash reserve ratio (CRR), banks will have more money to lend.

The European markets are trading weak . The FTSE index is down by 40, DAX index is down by 62 points and CAC index is down by 24 points.

The market breadth, indicating the health of the market was positive. On NSE, 888 shares advanced while 556 shares declined. Total of 72 shares remained unchanged.

Out of 50-share S&P CNX Nifty pack, 38 scrips advanced while 12 scrips declined. L&T was up by 5.93%, IDFC was up by 5.53% and SBI was up by 5.33% were the top gainers from the Nifty pack.

Grasim was down by 2.32%, Coal India was down by 1.57% and DLF was down by 1.05% were the top losers from the Nifty pack.

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