New Delhi: The Sensex rose 130.01 points to 25399.65 and the Nifty climbed 45.75 points to 7758.80 in the market closing on Monday. The breadth remained strong throughout the session.
Mahindra and Mahindra launched its new NuvoSport compact sports utility vehicle (SUV) in India at Rs. 7.35 lakh, ex-Thane showroom price.
The Reserve Bank of India (RBI) is embarking on an experiment to remove much of the discretion the country’s commercial banks have to set lending rates and force them to base borrowing costs on prevailing market rates.
ITC, ONGC, Axis Bank, Coal India, HDFC and Bharti Infratel were down one to two percent, whereas Bharti Airtel, Hindalco, Infosys, Tata Motors, Idea Cellular and Tata Power gained two to five percent.
The experiment carries risks, as India periodically suffers severe cash crunches. But the rewards should be lower costs for borrowers. The RBI adopted the rules, effective from the April 1 start of a new fiscal year, after deep frustration that it cut its key repo rate by 125 basis points last year, but banks lowered lending rates by only about 60 bps.
The RBI, keen to see monetary policy be effective, on Tuesday is expected to cut the repo rate another 25 bps as India bids to revive investment and spur economic growth.