Auto, Banks and Realty stocks swing highly after RBI announced rate cut

Rate-sensitive auto, bank, and realty stocks swung between gains and losses Thursday after the RBI's rate-cut announcement. Among the BSE auto pack, Ashok Leyland surged 6.18 percent, Apollo Tyres 4.27 percent, Eicher Motors 3.35 percent, Motherson Sumi Systems 3.09 percent, Bajaj Auto 3.03 percent, TVS Motor Company 2.83 percent and Tata Motors 2.64 percent.

Also, shares of Bharat Forge gained 2.47 percent, Hero MotoCorp 2.01 percent, Maruti Suzuki India 1.30 percent and Mahindra & Mahindra 1.01 percent. The auto index ended 1.77 percent higher at 19,603.69.

From bank index, IndusInd Bank fell by 0.82 percent, HDFC Bank 0.28 percent, SBI 0.21 percent, Bank of Baroda 0.18 percent and ICICI Bank 0.04 percent. On the other hand, shares of City Union Bank gained 1.99 percent, Federal Bank 0.82 percent, AXIS Bank 0.75 percent, Kotak Mahindra Bank 0.34 percent and Yes Bank 0.26 percent.

The bank index settled at 30,718.18, up 0.04 percent. The BSE realty shares also depicted a mixed trend, with Sunteck Realty rising 1.17 percent, Mahindra Lifespace Developers 0.95 percent, Phoenix Mills Ltd 0.63 percent, Godrej Properties Ltd 0.57 percent, Prestige Estates Projects Ltd 0.13 percent and Oberoi Realty Ltd 0.01 percent.

In contrast, Indiabulls Real Estate Ltd fell by 3.66 percent, Sobha Limited 0.81 percent and Omaxe Ltd 0.14 percent. The BSE realty index slipped 0.02 percent to close at 1,749.88. "This rate cut means a lot for the market as it is announced post budget. Though it primarily aims to keep inflation in a tab and boost growth, this is a much-needed breather for market and specifically interest rate sensitive sectors like housing, automobile," said Mustafa Nadeem, CEO, Epic Research.

In the first interest rate cut in 18 months, the RBI Thursday shed its hawkish stance to reduce policy rates in the maiden policy meeting under new Governor Shaktikanta Das, a move that may make home and other loans cheaper. The Reserve Bank of India's monetary policy committee (MPC) cut the repo rate by 25 basis points to 6.25 percent as inflation continues to remain benign. Benchmark equity indices gave up gains to end almost flat on Thursday.