Nifty holds 8,400; ICICI Bank, HDFC up 4%

Bank shares continue to lead the gains along with index heavyweights ITC and Reliance Industries.

Benchmark share indices continued to trade firm after the Reserve Bank of India in a surprise move cut the repo rate by 25 basis points but came off their early highs amid profit taking.

At 10:50AM, the 30-share Sensex was up 465 points at 27,812 after hitting an intra-day high of 27,948 and the 50-share Nifty was up 136 points at 8,413 after hitting a high of 8,454.

Bank shares continued to lead the gains along with index heavyweights ITC and Reliance Industries.

Among other shares, PC Jeweller rallied 6% to Rs 236 on BSE after the company said the government has designated the company as nominated agency for direct import of precious metals to be used for domestic business.

______________________________
(updated at 9:30AM)
Benchmark share indice surged over 2% in opening trade led by financials after the Reserve Bank of India in a surprise move cut the repo rate by 25 basis points.

At 9:30AM, the 30-share Sensex was up 546 points at 27,893 and the 50-share Nifty was up 160 points at 8,437.

The Reserve Bank of India today cut the repo rate by 25 basis points to 7.75% with immediate effect. One basis point is one-hundredth of a percentage point. This is the first repo rate cut since May 2013. The RBI kept the CRR unchanged at 4%.

The move, which had been widely anticipated by economists, comes after WPI inflation for December came in at 0.11%, marginally higher than the flat inflation logged in Novemeber.

"Inflation outcomes have fallen significantly below the 8% targeted by January 2015. On current policy settings, inflation is likely to be below 6% by January 2016.These developments have provided headroom for a shift in the monetary policy stance," RBI governor Raghuram Rajan said in a statement.

Data released on Wednesday showed that Wholesale price index (WPI) -based inflation rose marginally to 0.11 per cent in December from zero per cent the previous month, mainly on account of an increase in prices of food items. .

Meanwhile, foreign institutional investors were net sellers in Indian equities worth Rs 69.74 crore on Wednesday, as per provisional stock exchange data.

Asian markets are trading higher. Japan's Nikkei has gained around 1.2%. boosted by the rebound in crude oil prices and a pause in rising yen. Chinese markets are marginally higher. Hang Seng index has gained around 0.2% while Shanghai Composite index has gained around 0.1%.

Overnight, the US markets closed lower for the fourth straight session on concerns over global economic growth. Fall in copper prices to a five and half year low and weak retail sales data too checked the risk-appetite. Dow Jones Industrial Average declined over 1% while S&P 500 and Nasdaq Composite indices fell around 0.5% each.

All the sectoral indices were in the green with the BSE Bankex emerging as the top sectoral gainer up 3.3% followed by Realty, Capital Goods, Auto, FMCG, Oil and Gas among others.

Rate sensitive shares led by financials were the top Sensex gainers led by ICICI Bank, HDFC, HDFC Bank, SBI and Axis Bank.  Bank Nifty, the banking share index, was up 4.2% or 789 points at 19,393 in early trade and touched a record high of 19,410.

Index heavyweight ITC rebounded after the sharp fall on Wednesday and was trading 1.5% higher.

Capital goods shares also firmed up with L&T and BHEL up over 1% each.

Oil shares also rebounded from lower levels with Reliance Industries and ONGC up over 1% each.

Tata Motors was up 1.6% after the company reported 8% growth in global sales in December 2014.

In the auto segment, M&M, Maruti Suzuki, Bajaj Auto and Hero MotoCorp were up 0.3-1.4% each.

Hindalco was the sole Sensex loser down 1% tracking weak global copper prices.

In the broader market, the BSE Mid-cap and Small-cap indices were up 1% each.

Market breadth was strong with 1,123 gainers and 285 losers on the BSE.

Axis Bank, PNB, SBI. HDFC, HDFC Bank and ICICI Bank were the top Sensex gainers in early trades.