After market hours Wednesday, the Reserve Bank of India said it was lowering the repo rate, at which it lends to banks, to 5.0 per cent from 5.5 per cent, effective immediately. It also cut the reverse repo rate, at which absorbs excess cash from the banking system, to 3.5 percent from 4.0 per cent, effective immediately, it said in statement.
The median forecast is for a 3.03 percent rise in the wholesale price index in the 12 months to Feb 21, compared with a rise of 3.36 percent in the previous week. If realised, this would be the lowest reading since Oct. 19 2002, when inflation was at 3.01 percent.
Asian stocks were on the rise as another Chinese stimulus package boosted commodity prices and encouraged investors to jump into energy and natural resource shares. The Nikkei climbed 2 per cent, Topix rose 2.23 per cent, Hang Seng edged 0.14 per cent lower and Straits Times slipped 0.69 per cent.
US stocks staged a comeback as oil and metal prices rallied on speculation China will broaden efforts to boost growth and US lawmakers will reach agreement on a plan to stem mortgage defaults.
The Dow Jones Industrial Average gained 149.82 points, or 2.23 per cent, to end at 6,875.84, the Standard & Poor's 500 Index added 16.54 points, or 2.38 per cent, to 712.87 and the Nasdaq Composite Index rose 32.73 points, or 2.48 per cent, to 1,353.74.
Back home, Indian equities snapped three-day losing streak Wednesday by ending a volatile session in the positive terrain. Traders covered shorts in metals, oil&gas and healthcare space tracking gains in global markets.
Bombay Stock Exchange’s Sens*x closed at 8,446.49, up 19.20 points or 0.23 per cent. The index touched an intra-day high 8501.46 and low of 8373.24. National Stock Exchange’s Nifty ended at 2645.20, up 22.8 points or 0.87 per cent. The index touched a low of 2611.95 and high of 2655.70 during the day.
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RBI RATE CUT
5 Mar 2009, 0915 hrs IST, ET Bureau
MUMBAI: Stocks are likely to witness a relief rally on Thursday after the Reserve Bank of India gave the much needed booster shot to the economy.
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thanx for this update
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