Markets on a high after SLR cut

Mumbai: The equity markets extended their gains for the second consecutive day after the Reserve Bank of India decided to cut the statutory liquidity ratio by 50 basis points or half  per cent on Tuesday. The RBI move is expected to release an additional Rs 40,000 crore into the banking system, which according to market participants would increase credit off-take and spur economic growth.

Led by interest rate sensitive auto sector stocks, the Sensex climbed 184.85 points or 0.72 per cent to end the day at 25,908.01 while the Nifty closed the day at 7,746.55, gaining 62.90 points or 0.82 per cent.

“The RBI basically gave a lot of confidence to the market. The RBI decision will make available more funds in the hands of banks, which will result in higher credit off-take,” noted Deven Choksey, MD, K.R.Choksey Securities.