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Indices managed to close in green, though gave away most of the gains made during the day. However, Midcap and Small cap indices widely outperformed Sensex and Nifty. Sensex closed at 9958, up 55 points, while Nifty gained 13 points to close at 3046. It was a day of major policy announcements as much awaited interest rate cut and second Stimulus package amounting to Rs. 20000 cr., both came through. RBI cut the Repo rate and Reverse repo rate by 100 bps each while CRR was cut by 50 bps. As part of the second stimulus package government announced the liberalization of External commercial borrowing ECB policy. FII investment limit in corporate bonds has been hiked from USD 6 billion to USD 15 billion. Government will also form a SPV for liquidity aid against investment grade papers for NBFCs. PSU banks will work out larger credit line for commercial vehicle purchases by NBFCs.
The Sensex ended the day with a gain of 54.76 points, or 0.55% at 9,958.22 after touching a high of 10,070.28 and a low of 9,863.86. The broad-based NSE Nifty climbed 13.30 points, or 0.44% at 3,046.75 after hitting a high of 3,079.85 and a low of 3,021.80. BSE Midcap and Smallcap index rose 2.17% and 1.58% respectively.
Barring IT and Teck indices, which lost 1.2% and 1% respectively, all the sectoral indices ended with gains. Consumer Durable and Realty indices gained the most, up 2.4% and 2.1% respectively. Hindalco and DLF were the top gainers among the sensex, up 3.2% and 3% respectively, while Satyam and Bharti lost 2.6% and 2.1% respectively.
Buying demand in interest rate sensitive sectors on media reports that the government will announce a second stimulus package at about 18:00 IST today, 2 January 2009 to help shore up an economy and firm global markets boosted domestic bourses.
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