Banking, realty stocks soar by up to 6% on RBI interest rate cut hope in Jan

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SummaryInterest rate sensitive banking and realty stocks today surged by up to 6 per cent.

Interest rate sensitive banking and realty stocks today surged by up to 6 per cent on optimism RBI will cut rates in the third quarter monetary policy review next month even as the central bank kept rates unchanged today.

Among realty stocks, Unitech surged the most by 5.75 per cent, Godrej Properties gained 3.43 per cent and DLF shares rallied 2.45 per cent on the BSE.

Following the gain in these stocks, the BSE realty index ended at 2,120.67, up 2.38 per cent, the best performer among BSE peers.

In the financial space, SBI rose by 1.19 per cent, ICICI Bank (0.45 per cent), PNB (0.76 per cent) and Bank of India (2.93 per cent).

Led by a rally in these stocks, the BSE banking index closed at 14,322.15, up 0.34 per cent.

In the stock market, the BSE benchmark Sensex ended at 19,364.75, up 120.33 points.

"RBI kept rates and CRR unchanged. Due to this markets did take an initial hit. However, fundamentally, expectations of monetary easing are being building for first quarter of 2013. This helped the markets bounce back sharply," Milan Bavishi, Head Research, Inventure Growth & Securities said.

RBI kept the key interest rates unchanged, but hinted at easing of rates in January saying with decline in inflation, the focus of monetary policy would shift to removing impediments to growth.

Stocks More on Bank of India

Company INFO More on Godrej Properties

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