Nifty and Sensex up as investors wait for outcome of RBI meeting

(Reuters) – Indian stocks trimmed most of their initial gains to a slightly higher level on Monday as the central bank held a meeting of the board to discuss a number of liquidity-related issues. loan for banks and surrender of excess reserves to the government.

This is the first meeting to take place since the extent of the conflict between the RBI and the government has become public.

The Indian government is asking the Reserve Bank of India (RBI) to relax bank lending and equity rules, provide more money to non-bank financiers, finance small businesses and give money to banks. to the government better access to excess reserves created by the RBI.

New Delhi and the RBI are on the verge of settling some of their political differences, two sources told Reuters last week as they sought to defuse the tensions that had threatened to make investors discouraged.

The broad NSE Nifty was up 0.26% at 10,710.45 at 6:37 GMT, while the BSE Sensex benchmark rose slightly by 0.35% to 35,581.42.

The meeting's main focus is whether they have a break from the liquidity situation of non-bank financial corporations, said Saurabh Jain, assistant vice president of research at SMC Global Securities.

In addition, one should look at how many banks can get out of the swift corrective measure according to the wishes of the government and what RBI can do in this regard, aside from the issue of excess reserves held by the central bank, he added.

"Markets have also been gaining ground on oil price stability and the negativity stemming from institutional selling seems to be over while they are turning to buying," Jain said.

Real estate values ​​and metal stocks advanced, with the Nifty Realty index and the Nifty Metal index advancing 1.8% and 1.3%, respectively.

Hindalco Industries Ltd and Vedanta Ltd grew by 3.2% and 2.9%, while shares of Oberoi Realty gained up to 6%.

Yes Bank Ltd was the highest percentage gain on the Nifty, with shares up 7.1%, the largest daily gain in almost three weeks.

Among the gains, Tata Investment Corp shares jumped 7.9%, reaching their highest level since June 20 after the company approved a share buyback proposal.

At the same time, shares of Jet Airways India Ltd fell by 12.5%, registering their largest daily drop since August 10, after Tata Sons Ltd said Friday that it was only preliminary talks with the company. carrier in difficulty, but had not offered to acquire a stake.