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Sensex Makes Gains Despite Status Quo In Policy Rates

Tuesday, September 30, 2014
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MUMBAI:  A benchmark index of Indian equities markets was trading up 92 points or 0.35 percent, even as the Reserve Bank decided to keep key interest rates unchanged in its fourth bi-monthly policy review.

The benchmark index which was trading flat around pre-afternoon trade session, made gains despite the central bank’s decision to keep the repo rate, or the interest that banks pay when they borrow money from the RBI to meet their short-term fund requirements, unchanged at 8 percent.

The status quo in key policy rates mean the equated monthly installments (EMIs) on home, auto and other loans would remain unchanged as these rates determine lending and borrowing rates of the commercial banks.

A cut in these rates would have also reduced the cost of accessing funds for lending institutions. It would have also eased money supply in the financial system by making it more attractive for commercial banks not to park their funds with the RBI in the form of government securities, and instead lend it for commercial purposes.

Sector-wise information technology (IT), technology, entertainment and media (teck) and power declined.

However, healthy buying was observed in consumer durable, automobile, capital goods, healthcare and bank stocks.

The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 26,610.71 points, was trading at 26,689.50 points (11.50 a.m.), up 92.39 points or 0.35 percent from the previous day’s close at 26,597.11 points.
Source: PTI

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