Auto stocks saw a massive surge on Thursday after the Reserve Bank of India (RBI) slashed interest rates before trading hours today, by 25 basis points in a surprise inter-meeting cut, yielding to growing signs of slowing inflation and a flagging recovery.
RBI reduced the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 8% to 7.75% with immediate effect. Consequently, the reverse repo rate under the LAF stands adjusted to 6.75%, and the marginal standing facility (MSF) rate and the Bank Rate to 8.75% with immediate effect. It kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4% of net demand and time liabilities (NDTL).
Shares of Mahindra & Mahindra gained the most with rise of 3.43% followed by Ashok Leyland (1.95%), Maruti Suzuki India (1.83%), Tata Motors (1.75%), Hero MotoCorp (1.13%), Escorts (1.25%), Bajaj Auto (0.77%), Eicher Motors (0.59%) and TVS Motor Company (0.39%) on Thursday at 11.45 a. m.