Brokers said that Banking stocks extended the gains boosted by the the repo rate cut. Firm European markets supported the domestic bourses. The Reserve Bank of India (RBI) today, cut the repo rate, by 100 basis points to 8 per cent with immediate effect. The RBI said the cut in the repo rate, the rate at which the RBI provides funds to banks against the collateral of government bonds for a day to three days, was mainly aimed at financial stability amid ongoing global financial sector crisis. The global financial situation continues to be uncertain and unsettled, it said in a release.
Most lenders extended gains on repo rate cut, on hopes that banks will cut their prime lending rates which may boost lending growth.
HDFC Bank, India's second largest private sector bank by net profit, which last week reported strong Q2 results, rose by 7.22 per cent.
The bank's net profit rose by 43.2 per cent to Rs 527.98 crore on 62.8 per cent growth in total income to Rs 4,634.32 crore in Q2 September 2008 over Q2 September 2007 on 16 October 2008. ICICI Bank and State Bank of India rose between 4.78 per cent to 6.63 per cent.
India's largest home loan lender by operating revenue HDFC jumped by 3.52 per cent.
Reliance Industries rose by 3.65 per cent to Rs 1,352, recovering from a recent steep slide.
From the pack of 30 Sensex stocks, 26 rose. Sterlite Industries was up by 4.9 per cent to Rs 285.60, Reliance Communications went up by 5.09 per cent to Rs 245.85 and ITC rose by 4.6 per cent to Rs 165.85 to stand among the top gainers from the Sensex pack.
But Tata Power Company was down by 1.76 per cent to Rs 735, Bharat Heavy Electricals came down by 0.31 per cent to Rs 1,191.70 and Mahindra &Mahindra eased by 0.57 per cent to Rs 433.10, becoming the only losers from the Sensex pack.