Markets march higher on RBI stance; IT, financials spurt

Mumbai: The Sensex surged 362 points while the Nifty reclaimed the 11,200-mark on Thursday after the RBI left interest rates unchanged but maintained an accommodative stance to shore up growth.
The central bank also allowed banks to restructure some corporate and individual loans, even as it cautioned that protracted spread of COVID-19 poses a ‘downside risk’ for the economy.
After rallying 558 points during the day, the BSE Sensex ended 362.12 points or 0.96 per cent higher at 38,025.45.
The broader NSE Nifty jumped 98.50 points or 0.89 per cent to finish at 11,200.15.
Tata Steel was the top gainer in the Sensex pack, rising 3.82 per cent, followed by Infosys, Bajaj Finance, HCL Tech, TCS, ICICI Bank and Tech Mahindra.
On the other hand, M&M, Bharti Airtel, L&T and Axis Bank were among the laggards, shedding up to 0.75 per cent.
Sectorally, rate-sensitive banking, realty and auto indices settled up to 1.15 per cent higher.
Earlier in the day, the Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, left the benchmark repurchase (repo) rate unchanged at 4 per cent.
“Given the uncertainty surrounding the inflation outlook and extremely weak state of the economy in the midst of an unprecedented shock from the ongoing pandemic, the MPC decided to keep the policy rate on hold,” Das said.
He said the central bank would remain “watchful for a durable reduction in inflation to use the available space to support the revival of the economy.”
The committee unanimously decided to continue to keep its accommodative policy stance “as long as necessary to revive growth”.
The RBI also forecast a contraction in real GDP growth for April 2020 to March 2021 fiscal.
“Indian benchmark indices came off highs but still closed out a volatile day with gains, following RBI commentary regarding interest rate outlook. Although expectations of a rate cut were there, RBI kept rates on hold, following a rise in inflation. However, it has indicated that monetary policy will remain accommodative until growth revives.
“We believe that if inflation remains under control, there will be further policy easing from the central bank. With this event out of the way, markets (are) expected to turn focus back on earnings visibility and quality,” said Vinod Nair, Head of Research at Geojit Financial Services.
BSE IT, teck, FMCG, consumer durables, metal and realty indices jumped as much as 2.21 per cent, while telecom, capital goods and power ended in the red.
Broader BSE mid-cap and small-cap indices climbed up to 0.99 per cent.
Global equities stayed on the backfoot as investors awaited finalisation of a US stimulus package.
Bourses in Hong Kong and Tokyo closed lower, while Shanghai and Seoul ended in the green.
Stock exchanges in Europe were also trading on a negative note in early deals.
On the currency front, the rupee settled flat at 74.94 against US dollar.
Brent crude futures, the global oil benchmark, slipped 0.04 per cent to USD 45.19 per barrel.

Leave a Reply

Your email address will not be published.