Markets trimmed most of their early gains to end marginally higher on Monday, extending gains for the ninth straight session, amid profit taking in rate sensitive shares after RBI maintained neutral stance on key policy rates.
Profit taking was also seen in FMCG and IT sector stocks. The Sensex closed higher by 78 points at 18,542 and the 50-share Nifty advanced 32 points to close at 5,610 levels.
The markets started off on a strong note in trades today and Nifty touched its 52-week high of 5,652 after the cabinet committee on political affairs (CCPA) on Friday post the market hours gave a go ahead to the much awaited economic reforms such as clearing 51 per cent foreign direct investment (FDI) in multi-brand Reteail, FDI in Aviation sector and divesting stake in four public-sector undertakings (PSU) namely Oil India, MMTC, National Aluminum Company (NALCO) and Hindustan Copper.
Meanwhile, the European markets were trading lower as investors took a breather following a sharp two-week rally and a key indices hitting a strong resistance level, although the retreat could be short-lived as recent central bank moves boost risk appetite. The CAC40, DAX and FTSE were down 0.2-0.4 per cent each.
The Asian markets also ended on a mixed note. The Shanghai Composite slipped 2.1 per cent to close at 2,078 while the Hang Seng advanced 0.1 per cent to end at 20,658 levels.
Back home, taking a cautious stance, the Reserve Bank today cut CRR by 0.25 per cent - the percentage of deposits banks keep with central bank - but refrained from reducing lending rates in view of high inflation.
The RBI decision, which comes days after a slew of measures taken by the government to push growth, will release Rs 17,000 crore (Rs 170 billion) of primary liquidity into the system.
Following this decision the rate sensitive sector stocks witnessed buying in trades today. The BSE realty sector surged 6.2 per cent or 101 points to end at 1,734 levels. capital goods, bankex and power indices also closed higher by 2.2-3.7 per cent each.
ICICI Bank, SBI, Larsen & Toubro, BHEL, Hero MotoCorp, Tata Motors, Mahindra & Mahindra, HDFC, Tata Power, NTPC and Maruti Suzuki from the rate sensitive sectors were the top gainers among the Sensex stocks, they advanced by 1-5
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