The Indian stock markets rose nearly 1% after the Reserve Bank of India increased interest rates by less than expected. The benchmark BSE Sensex index rose 0.86% and the NSE Nifty index rose 0.94% after the RBI increased repo and reverse repo rates by 25 basis points each, which was lower than the 50 basis point increase many analysts expected. Broader markets also saw buying as analysts said the markets reacted positively because the interest rate hike was not as high as anticipated.

1. Stock markets positive to lower hike in interest rates
April 20th, 2010 - 1:20 pm ICT by IANS
Mumbai, April 20 (IANS) Benchmark indices of the Indian equities markets rose almost a
percent after the Reserve Bank of India (RBI) announced a lower than expected hike in key
interest rates.
The sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 17,394.68
points, rose to 17,551.02 points, up 150.34 points or 0.86 percent from its previous close at
17,400.68 points.
At the National Stock Exchange (NSE), the broader 50-share S&P CNX Nifty went up to
5,252.75 points against the previous close at 5,203.65 points, a gain of 49.1 points or 0.94
percent.
Buying went up in broader markets as well with both BSE midcap and BSE small cap indices
moving up from their morning levels.
The RBI hiked the repurchase (repo) rate and the reverse repo rate by 25 basis points each. At
the same time, it also increased the cash reserve ratio to 6 percent from 5.75 percent earlier.
“The markets have reacted positively because the hike was lower than expected. At least a 50
basis point increase was expected across the board,” said Jagannadham Thunuguntla, the
equity head for brokerage firm SMC Capitals.