Mumbai: The BSE Sensex rose on Tuesday led by lenders such as State Bank of India, as hopes parliament will pass the banking amendment bill outweighed disappointment after the Reserve Bank of India kept interest rates and the cash reserve ratio unchanged.
State Bank of India rose 1.21 per cent, after falling as much as 2.8 per cent earlier in the day, while ICICI Bank ended up 0.4 per cent. The Nifty recovered from day's lows to close in the green at around 5900 and the Sensex too was up 120 points, ending the day at 19,364. Markets analysts are watching whether the government is going to continue with the reforms momentum.
On the economic front, the RBI today decided to keep repo rate unchanged at 8 per cent, in-line with expectations. And contrary to the expectations, the central bank also decided to maintain the cash reserve ratio unchanged at 4.25 per cent. However, in its mid-quarter monetary policy review, the RBI signalled a pro-growth stance.
In what comes as big disappointment for the government as well as Vedanta's Anil Agarwal, sources indicate that the law ministry is against divestment of the government's residual stake in Hindustan Zinc under the Metal Corporation Act of 1976.
In stock specific action, Bharti Airtel was the top gainer today it rose more than 4.23 per cent followed by BHEL which was up 4.14 per cent. Tata Steel saw an upmove of 3.76 per cent. Hindalco and Sun Pharma also made it to the gainers list-up more than 2 per cent.
Maruti Suzuki was the major loser on the Sensex; it slipped 1.64 per cent. ONGC, Bajaj Auto, Reliance and HDFC Bank were the other losers. In some key global news, China's foreign direct investment inflows fell 3.6 per cent in the first eleven months of 2012 from a year earlier. China drew $100.0 billion in FDI between January and November. Inflow for November alone also down 5.4 per cent on year-ago levels at $8.3 billion.
The differences over fiscal cliff resolution narrowed significantly last night. According to sources president Barack Obama made a counter-offer to republicans proposing leaving lower tax rates in place for everyone except those earning $400,000 and above... That's up from the $250,000 threshold the president was demanding earlier. However Obama's offer is still far from republican proposal of $1 million cut off.
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