Among individual stocks, Kotak Mahindra Bank jumped 7 per cent, followed by Axis Bank (up 5 per cent), RBL Bank (3.8 per cent), IndusInd and ICICI Bank, up 3 per cent each. Besides, State Bank of India (SBI), HDFC Bank, and Federal Bank were up in the range of 0.5 and 2.5 per cent.
At 10:30 am, the NSE Nifty Bank index was the top gainer among the sectoral indices, up 3 per cent. In comparison, the benchmark Nifty50 index was at 9,357-mark, up 2 per cent.
The RBI's annoucment follows Franklin Templeton
MF’s move to wind up six of its debt schemes amid liquidity crunch. On Friday, the corporate bond market felt the tremors caused by the surprise winding-up of the schemes. Yields in corporate debt market moved up by 20-25 basis points (bps), leading to widening of the spread between government securities and corporate debt papers. This could increase the cost of borrowing further. “If MF participation in debt markets
dips, that would further hurt the liquidity and lead to higher yields for corporates,” said a bond market dealer.
“Given the large participating that MFs have in the bond markets, it is important that regulatory bodies look at interlinkages in the system, to curb further risks and contagion,” said Rajiv Shastri, an MF industry and debt market expert.
Industry experts said Franklin’s action would impact as many as 310,000 investors, of whom 300,000 are retail and high net worth investors.
According to a Business Standard report, anticipating a run on fixed-income schemes from investors, following Franklin Templeton’s surprise move, MFs weere seeking a liquidity window from the Reserve Bank of India (RBI), like it did in 2008 and 2013. READ HERE