Interest-rate sensitive bank, realty, auto shares end on mixed note after RBI measures

PTI New Delhi, Delhi, India Mar 27, 2020, 06.20 PM(IST)

File photo. Photograph:( Reuters )

Story highlights

The Reserve Bank of India (RBI) on Friday cut benchmark interest rate by 75 basis points to 4.4 per cent to deal with the hardship caused due to the outbreak of COVID-19.

Interest-rate sensitive bank, realty and auto shares which had mostly rallied during morning trade on Friday closed on a mixed note even after the Reserve Bank of India cut benchmark interest rate by 75 basis points to deal with the hardship caused by COVID-19 outbreak.

Shares of Federal Bank closed 6.34 per cent higher, Axis Bank 4.98 per cent, ICICI Bank 2.44 per cent, State Bank of India 1.66 per cent and Kotak Mahindra Bank 0.64 per cent.

In contrast, IndusInd Bank settled 5.94 per cent lower, City Union Bank fell 3.86 per cent, RBL Bank 2.93 per cent, and HDFC Bank 0.91 per cent.

The BSE Bank index closed 0.96 per cent higher at 22,965.51.

The Reserve Bank of India (RBI) on Friday cut benchmark interest rate by 75 basis points to 4.4 per cent to deal with the hardship caused due to the outbreak of COVID-19.

The central bank also reduced the cash reserve ratio (CRR) of all banks by 100 basis points to 3 per cent with effect from March 28 for 1 year.

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services called the measures "A massive bazooka from the RBI in "mission mode".

He said it is a relief-cum-stimulus package with a big repo cut and even bigger reverse repo cut. This together with CRR cut will be a big stimulus for banks to lend. The combination of measures to boost liquidity, improve monetary transmission and relax repayment pressures will act with force multiplier in the economy.

Among realty companies, Sunteck Realty ended 9.93 per cent higher, Indiabulls Real Estate 4.89 per cent, Prestige Estates Projects 3.92 per cent and DLF 0.58 per cent, while Oberoi Realty dropped 5.66 per cent, Godrej Properties 3.78 per cent, Sobha 0.90 per cent and Omaxe fell 0.71 per cent.

The realty index dipped 0.78 per cent to close the trade at 1,427.65.

"Markets traded volatile and finally settled on a flat note, taking a breather after the recent recovery. The benchmark indices opened higher, however, gains soon fizzled out despite big and bold moves announced by the RBI to address liquidity needs and ensure financial stability," said Ajit Mishra, VP - Research, Religare Broking Ltd.

Among auto pack, shares of M&M finished 2.83 per cent higher, Ashok Leyland 0.46 per cent, Apollo Tyres 0.49 per cent, while Hero MotoCorp dropped 8.04 per cent, TVS Motor Company 5.54 per cent, Maruti Suzuki India 4.81 per cent, Bajaj Auto 2.48 per cent and Tata Motors 0.21 per cent.

The auto index fell 2.35 per cent to close at 11,223.81.

"RBI has come out with lots of measures to ensure the stability of the financial system and inject liquidity in the market amid ongoing turmoil of pandemic,? said Amit Gupta, Co-Founder & CEO, TradingBells.

He noted that it is a very good policy to cheer the market, but the problem is that the market has already rallied too much from lower levels ahead of policy and real trend decider for the market will be the trend in new cases of Covid-19 globally and locally.

Meanwhile, the domestic equity markets closed on a weak note with the benchmark Sensex falling 131.18 points to close at 29,815.59.