Business Standard

Sensex opens above 20,000 mark, banks zoom

anking shares have zoomed after RBI on Monday further eased liquidity by cutting the MSF rate

SI Reporter Mumbai
Markets have made a gap up opening with Sensex and Nifty opening above 20,000 mark and 5,950 levels, respectively.

By 9:25, the Sensex was higher by 207 points at 20,102 mark and the Nifty gained by 63 points at 5,970 levels.

Banking shares have zoomed after the Reserve Bank of India (RBI) on Monday further eased liquidity by cutting the marginal standing facility (MSF) rate, a key overnight interest rate, by 50 basis points to 9%, with immediate effect.

This is the second time in less than a month that the central bank has cut the key overnight interest rate, taking advantage from the rupee’s recent surge.

On the global front, the dollar skidded to near an eight-month low on Tuesday as the U.S. government shutdown entered its second week, leaving investors on tenterhooks as politicians in Washington made little headway in agreeing a deal to avoid an historic U.S. debt default.

This anxiety kept Asian shares on the back foot, though a private survey of China's services industry helped cap losses as it showed the sector continued to expand in September, albeit at a slower pace than in the previous month.

Tokyo's Nikkei eased 0.2% after hitting a five-week lower earlier. MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.1%, while China's CSI300 index added 0.1% on its first trading day in a week after the National Day holidays.

Back home, BSE Bankex has surged by over 3% followed by counters like Realty, Capital Goods, Auto, Consumer Durables and PSU, all gaining between 1-1.4%. Apart from IT, all the major BSE sectoral indices are trading in positive zone.

Banking shares have rallied up to 8% in early morning deals on the National Stock Exchange after the Reserve Bank of India on Monday after market hours eased interest rate on borrowings under the marginal standing facility (MSF) by 50 basis points (bps) to 9%.

The MSF is an emergency window that banks borrow from when faced with a funds crunch.

 

The NSE banking index Bank Nifty has surged 3.2% at 10,403 points as compared to 0.95% rise in benchmark index CNX Nifty.

YES Bank, IndusInd Bank, Kotak Mahindra Bank, Axis Bank, Union Bank of India, ICICI Bank and Bank of Baroda from Bank Nifty are up in the range of 3-8%. State Bank of India, Bank of India, HDFC Bank, Punjab National Bank and Canara Bank are trading higher between 2-3% on the NSE.

Other notable gainers are Tata Motors, L&T, Bharti Airtel, Tata Power and Maruti Suzuki.

On the losing side, TCS, Coal India and Sesa Sterile are trading in red zone.

The broader markets are under performing the benchmark indices- BSE Midcap and Smallcap indices have gained between 0.4-0.7%.

The market breadth in BSE remains firm with 586 shares advancing and 182 shares declining.

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First Published: Oct 08 2013 | 9:25 AM IST

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