Bank scrips firm up ahead of RBI review meet

Written by Markets Bureau | Mumbai, Jul 30 | Updated: Jul 31 2007, 05:07am hrs
Following the trend of its Asian peers, the Indian markets on Monday ended flat amid high volatility. Even while the Sensex managed to bounce back after Fridays huge losses and opening with declines of nearly 80 points, last minute selling pressure saw the index closing flat. Before closing at 15,234.57 points, the Sensex was up by 26.34 points or 0.17%. While the broader Nifty closed 5.15 points or 0.12% down at 4,440.05 points.

The Asian markets were weak in the opening session following weak closing of US markets on previous Friday. The Nikkei of Japan recovered its early hour falls following domestic political turmoil and managed to end flat by gaining 0.03% or 5 points at 17,289.30. Shanghai Composite was the top gainer up 2.20% or 95.41 points at 4,440.77 followed by Hang Seng up 0.75% or 169.49 points at 22,739.90. Taiwan Weighted was down 0.98% at 89.71 points at 9,072.57 points.

In the US, the Dow Jones index lost further ground for the second straight day on Friday, July 27, as it shed over 200 points to close at 13,265. In last two trading sessions, on Thursday and Friday, the Dow has lost over 500 points. The S&P 500 too ended down 23.71 points or 1.60 % at 1,458.95 and the Nasdaq Composite index fell 37.10 points, or 1.43 %, to 2,562.24.

Back home, banking shares surged ahead of the Reserve Bank of India (RBI)s credit policy review meeting scheduled on Tuesday. Market watchers believe that RBI would leave the interest rate unchanged. Based on this assumption, the BSE Bankex was the top gainer up 1.70% or 135. 90 points before closing at 8,055.14 points. Index pivotal State Bank of India (SBI) was up 5.26% or Rs 78.95 at Rs 1,579.

Sarika Lohra, banking analyst, Angel Broking states that there is no major rate hike expected in RBIs policy review. However, the SBI stock was up on the back of good numbers it posted for the first quarter, while some other banking heavyweights too saw a bounce back from Fridays low, she said.

The market breadth looked balanced as 1,342 (50.45%) shares advanced against the declines of 1,258 (47.59%) shares. In the Sensex pack, 17 stocks advanced while 13 ended in the negative territory.