Markets hail RBI credit policy

The financial market gave a thumbs up to Reserve Bank of India's annual credit policy, which pushed up the benchmark Sensex higher by over 225 points and lifted the Rupee to over a nine-year high.

The RBI annual monetary and credit policy, which left all key rates unchanged, boosted trading sentiment in stocks, forex and bond markets at 1230 hrs and triggered all-round buying.

While the Bombay Stock Exchange's Sensex zoomed by over 225 points to 14,153.58, the rupee surged by 51 paisa against the US dollar which traded at Rs 41.17.

The Indian unit has appreciated over 12 per cent against the dollar since August 2006, when it was trading at over 47 to the greenback.

The government bonds rose, pushing 10-year yields down to the lowest this month. Bonds rallied and the yield on the benchmark 8.07 per cent bond due for 2017 fell 4 basis points, or 0.04 percentage points, to 8.03

per cent.

On the stock market, the major contribution to the rise in the Sensex came in from Bank index, which shot up by 313.41 points, or 4.55 per cent at 7,195.25 points followed by Auto index by 110.22 points, or 2.29 per cent at 4,913.13 points.

Trading activity was more confined to index-related major banking stocks like State Bank of India, Punjab National Bank, besides private sector stocks such as ICICI Bank, HDFC Bank and UTI Bank. Most of banking stocks were up between the range of 3 and 7 per cent across the board.

• RBI Credit Policy 2007-08: Complete Coverage