UPDATE FOR OCTOBER 20

Central bank's repo rate cut provided a much needed respite

rallyto the investors which have seen a massive erosion in

their wealthin the past few days. The volatility was high and

the marketbreadth was weak, indicating a cautious undertone.

The BSE Sensexrose 247.74 points or 2.48%. Firm Asian and

European marketsprovided added support to domestic bourses.

Fall in interest rate boosts stocks as it results in lowerborrowing

costs for corporates. The Reserve Bank of India (RBI),today,

cut the repo rate, by 100 basis points to 8% with immediateeffect.

Repo rate is the rate at which the RBI provides funds tobanks

against the collateral of government bonds for a day to threedays.

Banking stocks and IT stocks rose. Satyam Computer Services

andWipro rose more than 8.5% each while Tata Consultancy

Services rosemore than 9%.

Asian and European stocks were firm as investors took comfort

inglobal efforts to prop up the banking system, allowing for

somebargain hunting. Trading in US index futures suggested the

Dowwould rise 141 points at the opening bell.