Rate-sensitive stocks rebound; Maruti Suzuki hits record high

HDIL, Indiabulls Real Estate, IndusInd Bank, BOI, M&M and Maruti Suzuki were up more than 3% each on the NSE.

Shares of interest rate-sensitive sectors such as banking, real estate and autos have moved higher by up to 11%, bouncing back over 15% from their intra-day’s low after the Reserve Bank of India (RBI) surprisingly cut interest rates by 50 bps against the expectation of 25 bps.

Housing Development & Infrastructure (HDIL), Indiabulls Real Estate and DLF from the real estate, IndusInd Bank, Bank of India, Oriental Bank of Commerce and IDBI Bank from banking, Mahindra & Mahindra and Maruti Suzuki India from the automobile sector were trading higher by more than 3% each on the National Stock Exchange (NSE).

At 02:12 pm, Bank Nifty, the banking shares index, was up 2% or 362 points at 17,461, recovering 813 points or 5% from its intra-day low of 16,648 touched before the meet. CNX Realty index was up 3%, while CNX Auto up 2% compared to 1.6% rise in the CNX Nifty.

Among the individual stocks, HDIL has rallied 11% to Rs 73.65, bouncing back nearly 16% from its intra-day low of Rs 63.70 on the NSE.

Maruti Suzuki India has moved higher by 4.5% to Rs 4,740, also its record high on the NSE. The stock recovered 6% from its intra-day low of Rs 4,467 touched before RBI policy meet.

The rate cut should help boost the sentiment in the Indian markets which have staged a sharp recovery, said Ms Nitasha Shankar, Vice President - Research, YES Securities.

"With CPI and WPI numbers very much within comfort zone and industrial growth not picking up, RBI’s 50 bps cut in policy rate is a decisive pro-growth move and is welcomed,” said Mr. Sunil Kanoria, Vice-Chairman, Srei Infrastructure Finance Limited.

“There is still an air of uncertainty on both external and domestic fronts. The timing of a Fed rate hike and how global economy will react to it, still remain unknown. How the monsoons will influence India’s inflation levels, will be realized only with a lag. Hopefully, this is the beginning of a series of rate cuts by RBI. However, rate cuts by RBI need to be supplemented by administrative reforms by the government to restart the growth cycle,” adds Kanoria.