Shares of home loan provider Housing Development Finance Corporation (HDFC) surged to a record high in intra-day trade on Thursday, in an otherwise volatile stock market. HDFC shares soared more than 2.20 per cent to hit the day's high at Rs 2,059 after the RBI lowered repo rate by 25 basis points to 6 per cent, in its first bi-monthly rate review of financial year 2019-2020.
The shares have been on a gaining spree and rose over 11 per cent in the last one month. Outperforming the benchmark indices, the HDFC shares jumped more than 23 per cent in the last one year.
Continuing its gaining streak for the third straight session, shares of the large cap company gained as much as 2.29 per cent to touch a 52-week high of Rs 2,059, breaching its previous high of Rs 2,051, touched on July 30, 2018. Paring some of gains, the stock closed at Rs 2,041.25, up 1.42 per cent.
According to data available with exchange, as much as 0.96 lakh shares changed hands on the BSE as compared to two-week average of 2.32 lakh shares.
In a similar trend, shares of the company settled 1.43 per cent higher at Rs 2,041.90 on the National Stock Exchange. It touched an intra-day high and low of Rs 2,058.80 and Rs 2,006.30.
The investors were buoyed by the RBI decision to cut interest rate as it will improve liquidity in the system and will provide a boost to lending in the realty sector. This is for the second consecutive reduction in the repo rate by the newly appointed RBI Governor Shaktikanta Das.
"We have allowed an additional 2 per cent of LCR to reckon as Level 1 high-quality liquid assets for the purpose of computing the LCR of the banks. While this move will harmonise the liquidity requirements of banks with LCR, it will also release additional liquidity for lending by banks," RBI Governor Shaktikanta Das said after Monetary Policy Committee meet.
This is good news for consumers who are planning to buy homes or retail borrowers as their EMIs are likely to go down assuming that banks pass on the benefits of the lowered rates to the end consumers. As the central bank lowers the key policy rates, it is likely that banks will follow suit and reduce their marginal cost of funds based lending rates (MCLR). The MCLR is an internal benchmark below which banks cannot lend, except in some cases allowed by the RBI.
Meanwhile, the BSE Sensex lost 192 points or 0.49 per cent to settle at 38,685 and the NSE Nifty ended below 11,600 level at 11,598, down 46 points or 0.39 per cent.
Edited by Chitranjan Kumar