Stocks of select housing finance companies and public sector banks gained after the RBI reduced the risk weight on high value home loans and cut statutory liquidity ratio (SLR) for banks by 50 basis points to 20 per cent.
The gainers on the BSE included lenders catering to the affordable housing segment, led by Can Fin Homes (up 5.23 per cent), PNB Housing Finance (5.73 per cent), Gruh Finance (2 per cent), DHFL (1.47 per cent) and LIC Housing Finance (0.41 per cent).
Top home financier HDFC, however, fell 0.53 per cent and Indiabulls Housing Finance closed flat.
The public sector banks gained over the SLR reduction. The NSE’s Nifty PSU Bank Index gained 1.24 per cent while the BSE’s Bankex Index gained 0.73 per cent. The PSU gainers on NSE included Oriental Bank of Commerce (up 4.69 per cent), Bank of India (2.56 per cent), Punjab National Bank (2.11 per cent), Bank of Baroda (1.63 per cent), Canara Bank (1.55 per cent), Allahabad Bank (1.35 per cent), State Bank of India (1.25 per cent), Union Bank (1.24 per cent), Andhra Bank (1.11 per cent) and IDBI Bank (0.75 per cent).
Among the private banks the gainers included Federal Bank (2.04 per cent), ICICI Bank (1.91 per cent) and Axis Bank (0.58 per cent).
Commenting on RBI’s monetary policy decisions Sunil Sharma, chief investment officer, Sanctum Wealth Management, said, "While the repo rate was unchanged, the statutory liquidity ratio (SLR) was cut by 50 bps to 20 per cent of the net demand and time liabilities (NDTL). The move to cut SLR could be interpreted as a measured tool for minor monetary easing.
“Given the political regime’s focus on housing and allied initiatives in the sector, the RBI reduced the risk weight on certain categories of housing loans sanctioned on and after Wednesday. The risk weights have been reduced in certain loan-to-value (LTV)/outstanding loan baskets from 50 bps to 35 bps and 75 bps to 50 bps,” Sharma said.
raviranjan@mydigitalfc.com
