Lenders gain on likely cut in RBI repo rate

ICICI Bank rises 1.69% and SBI up 3.2%. Indian shares rose yesterday, after weaker-than-expected growth in industrial output data sparked expectations for an interest rate cut next week, boosting lenders such as ICICI. India's industrial production grew at a slower-than-expected 4.1 per cent pace in February from a year earlier, raising expectations the Reserve Bank of India will cut the repo rate at its policy meeting on Tuesday. Though banks would benefit more directly from a cut in the cash reserve ratio, lowering India's main lending rate could improve growth prospects, helping a sector clamouring for relief either in liquidity or in bolstering the economy, analysts said. Industry growth "Market expects that RBI may cut interest rate on 17th April which will boost the industry growth and investment," commented Rikesh Parikh, vice-president of equities at Motilal Oswal Securities. The 30-share Sensex rose 0.77 per cent to close at 17,332.62, while the broader Nifty closed 0.96 per cent up at 5,276.85. Lenders were among the leading gainers. ICICI Bank rose 1.69 per cent while State Bank of India gained 3.2 per cent. Bharat Heavy Electricals rose 2.7 per cent after the capital goods sub-index in the output data grew 10.6 per cent in February from a year earlier, sharply recovering from an annualised fall of 1.7 per cent in January. Maruti Suzuki Shares in India's largest car maker Maruti Suzuki rose 3.14 per cent on hopes for improved sales from its newly-launched vehicle Ertiga, which analysts said was priced low enough to make it competitive in the utility vehicle segment. However, among decliners, India's second-largest software exporter Infosys fell 1.92 per cent ahead of its quarterly earnings scheduled for today as investors fear weaker results for the sector. Rivals Tata Consultancy Services lost 0.6 per cent, while Wipro declined 1.5 per cent. From: Gulfnews