Banking, auto index hits new high

S&P BSE Bankex was up 3% or 622 points at 21,243, while S&P BSE Auto index was up 1.6% or 303 points at 19,155 at 1236 hours.

Shares of interest rate sensitive mainly banking and automobile sectors are trading higher ahead of the Reserve Bank of India (RBI) monetary policy meeting on December 2.

Bank of Baroda, Syndicate Bank, Punjab National Bank, Canara Bank, Jammu and Kashmir Bank, Oriental Bank of Commerce, Uco Bank, Bank of India, Union Bank of India and Allahabad Bank are from the banking sector rallied more than 5% each. Tata Motors, Maruti Suzuki India, Mahindra and Mahindra, Hero Motocorp and Eicher Motors are up 1-2% on the BSE.

At 1236 hours, S&P BSE Bankex, the largest gainer among the sectoral indices, was up 3% or 622 points at 21,243, while S&P BSE Auto index was up 1.6% or 303 points at 19,155. The banking index (21,312) and auto index (19,220) have touched their respective new high during intra-day trade.

According to Business Standard reports, Finance Minister Arun Jaitley is likely to coax Reserve Bank of India (RBI) Governor Raghuram Rajan to cut interest rates when the two meet on December 1 in New Delhi ahead of the central bank’s monetary policy meeting a day later.

The finance ministry might extend the excise duty cuts beyond December 31 and till March 31, 2015 as auto and housing industry continues to struggle with sluggish demand owing to high interest rates, added report.

Meanwhile, the steep slide in global crude oil prices will help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.

Crude oil sank to a four-year low, heading for the biggest weekly tumble since 2011, after the Organization of Petroleum Exporting Countries (OPEC) refrained from reducing output.