Share market update: Bank, realty stocks rise after RBI cuts repo rate by 75 bps

NEW DELHI: Rate sensitive realty and bank stocks were trading with gains in Friday's session as the RBI finally bit the bullet and responded to the coronavirus-induced crisis with a whopping 75 basis points cut in the repo rate, bringing it down to 4.4 per cent.

The repo rate has thus fallen to the lowest ever. Before this, it had hit the lowest point of 4.74% in April 2009 in the wake of the Global Financial Crisis.

The central bank also cut the cash reserve ratio or CRR by 100 basis points to 3 per cent with effect from March 28, unlocking Rs 1.37 lakh crore primary liquidity in the banking system. The reverse repo rate, too, was lowered by 90 basis points.

Vinay Pandit, Head - Institutional Equities, IndiaNivesh said, "The rate cuts, EMI and working capital holiday (not waiver) is a positive for individuals and companies alike, though with forbearance of fixed costs for corporates. Will ease the pressure on cash flows in current times where cash flows (revenues slowing and expenses continuing) are impacted significantly, especially for MSME, small business and individuals who are impacted due to low visibility on income. Overall a positive for non-banking stocks, though need to wait and watch how this plays out for BFSI companies. One can read it as an indirect extension of NPA recognition for stressed assets."


The Nifty Bank index was trading 2.09 per cent up at 20023.2 while the Nifty Realty index was trading 2.21 per cent up at 189.9 around 11:02 am. Meanwhile, the Nifty Auto index was trading 1.14 per cent down at 5003.50.

Shares of Brigade Enterprises (up 9.55 per cent), Indiabulls Real Estate (up 4.89 per cent), Mahindra Lifespace Developers (up 4.66 per cent), Prestige Estates Projects (up 4.11 per cent), DLF (up 4.02 per cent), SOBHA (up 3.6 per cent), Sunteck Realty (up 3.31 per cent), Phoenix Mills (up 1.55 per cent) and Godrej Properties (up 0.62 per cent) were among the top gainers in the realty stocks.

Shares of Bandhan Bank (up 14.87 per cent), Axis Bank (up 10.6 per cent), IDFC BANK (up 4.37 per cent), State Bank of India (up 3.35 per cent), Federal Bank (up 3.23 per cent), RBL BANK (up 2.15 per cent), Punjab National Bank (up 1.8 per cent), IndusInd Bank (up 1.1 per cent), ICICI Bank (up 1.06 per cent) and Kotak Mahindra Bank (up 0.92 per cent) were among the top gainers in the banking pack.

Auto stocks were trading mixed after the announcement as Ashok Leyland (up 7.35 per cent), Bosch (up 4.7 per cent), Amara Raja Batteries (up 3.68 per cent), Motherson Sumi Systems (up 1.95 per cent), Tata Motors (up 1.13 per cent) and Exide Industries (up 0.79 per cent) were among the top gainers.

While, Bharat Forge (down 6.13 per cent), Hero MotoCorp (down 4.41 per cent), Apollo Tyres (down 3.22 per cent), Bajaj Auto (down 2.38 per cent), Maruti Suzuki (down 2.3 per cent), Mahindra & Mahindra (down 1.3 per cent), Eicher Motors (down 0.56 per cent), TVS Motor Company (down 0.2 per cent) and MRF (down 0.15 per cent) were the top losers in the index.

Sudhakar Shanbhag, CIO, Kotak Mahindra Life Insurance said, “The market has been patiently waiting for our central banks action in light of what all global central banks have done till now post the COVID 19 scare. The MPC has come with really big measures including rate cuts, CRR cut, Floating rate long-term repos for investment grade corporate bonds and CPs, forbearance on loans in terms of moratoriums and deferral of interest payments, capital conservation buffer deferment by 6 months, Offshore NDF market relaxations. This seems to be a comprehensive package and very necessary at this stage when growth will be under pressure.”

Benchmark NSE Nifty50 index was up 15.45 points at 8656.90, while the BSE Sensex was down 156.69 points at 29790.08.

Among the 50 stocks in the Nifty index, 28 were trading in the green, while 22 were in the red.

Shares of YES Bank, SBI, Vodafone Idea, ICICI Bank, Ashok Leyland, Tata Motors, Axis Bank, IDFC First Bank Ltd., NTPC and Bank of Baroda were among the most traded shares on the NSE.