Rate-Sensitive Stocks Surge Nearly 8% After RBI Announces Liquidity Injection

Shares sensitive to interest rates surged nearly 8% after the Reserve Bank of India (RBI) announced a liquidity infusion of Rs 1.5 lakh crore. This move aims to ease liquidity constraints and may lead to an interest rate cut in February's RBI policy meeting. The banking and auto sectors led the recovery in benchmark indices, though the broader market lagged behind.

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The RBI plans to purchase government securities worth Rs 60,000 crore in three phases. This is part of its strategy to manage liquidity in the banking system. Additionally, a USD/INR Buy/Sell Swap auction of USD 5 billion for six months is scheduled for January 31, 2025. These measures are expected to stabilise liquidity conditions.

Sectoral Performance and Key Stock Movements

Among sectors, realty, finance, banking, and auto saw significant gains. In contrast, pharma, energy, media, oil & gas, IT, metal, and FMCG experienced declines. "The scrip of Axis climbed 3.82 per cent to close at Rs 984.10 apiece," noted Ameya Ranadive, Chartered Market Technician at StoxBox.

Axis Bank, HDFC Bank, and ICICI Bank were top performers in the Sensex pack. Axis Bank rose by 3.82% to Rs 984.10 per share. HDFC Bank increased by 2.51% to Rs 1,670.55, while ICICI Bank gained 1.54% to reach Rs 1,246.95 on the BSE.

In financial services, Cholamandalam Investment and Finance surged by 5.44% to Rs 1,239.15 per share. Bajaj Finance advanced by 4.27% to Rs 7,604.70, while Shriram Finance rose by 3.54% to finish at Rs 529.75 per share.

Realty and Auto Sector Gains

The realty sector also saw notable gains with Sobha soaring by 7.81% to end at Rs 1,287.90 per share on the BSE. DLF climbed by 3.36% to Rs 726.70, and Godrej Properties jumped by 3.07% to Rs 2,162.55.

In the auto sector, TVS Motor Company shares climbed by 4.85% to end at Rs 2,334.95 per piece on the exchange. Tata Motors increased by 2.15% to Rs 728.45, while Mahindra & Mahindra appreciated by 1.26% to finish at Rs 2,868.05 apiece.

The BSE Bankex index surged by 813.08 points or 1.49%, closing at 55,516.37 due to gains in major banking stocks like Axis Bank and HDFC Bank.

Market Indices Overview

The Sensex rose by 535.24 points or 0.71%, settling at 75,901.41 after peaking at a high of 76,512.96 during the day with a surge of over a thousand points or about 1.52%. Meanwhile, the NSE Nifty appreciated by 128.10 points or about half a percent to close at 22,957.25.

The broader market's underperformance was evident despite strong performances from specific sectors like banking and auto.

The RBI will continue monitoring liquidity conditions closely and will take necessary actions as required for maintaining orderly market conditions.