Mumbai, Feb 10 (PTI) Equity benchmarks defied gravity for the third session on the trot on Thursday after the RBI left interest rates unchanged but retained its accommodative policy stance to support the post-pandemic economic recovery.
A positive trend in global stocks also supported the domestic markets, traders said.
Overcoming a wobbly start, the 30-share BSE Sensex settled 460.06 points or 0.79 per cent higher at 58,926.03. Likewise, the broader NSE Nifty jumped 142.05 points or 0.81 per cent to end at 17,605.85.
Tata Steel was the top gainer in the Sensex pack, spurting 2.11 per cent, followed by Infosys, HDFC Bank, HDFC, Kotak Bank, M&M and PowerGrid.
Only four stocks closed in the red — Maruti, Ultratech Cement, Nestle India and Reliance Industries, dipping up to 1.64 per cent.
The Reserve Bank of India (RBI) on Thursday held its key lending rates steady at record low levels for the 10th straight meeting to support a durable recovery of the economy from the COVID-19 pandemic.
RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) decided to hold the lending rate, or the repo rate, steady at 4 per cent, and the reverse repo, or the rate at which it absorbs excess cash from lenders, unchanged at 3.35 per cent.
The six-member MPC, which has been on pause since August 2020, voted unanimously to maintain the status quo on the repo rate and by a majority of 5-1 to retain the accommodative policy stance as long as necessary, he said.
The RBI projected a 7.8 per cent economic growth in the coming fiscal starting April 1, down from 9.2 per cent expected in 2021-22, in view of uncertainties on account of pandemic and elevated global commodity prices.
It also lowered the inflation outlook to 4.5 per cent for the next fiscal from 5.3 per cent in the current year.
“The domestic market maintained its upward momentum aided by strong global cues and positive RBI policy. Though the market expected RBI to moderate its policy tone, the central bank surprised with a super dovish statement by maintaining its accommodative stance, modest inflation forecast and GDP growth of 7.8 per cent in FY23.
“Global market rallied ahead of the release of the US inflation data backed by healthy earnings results,” said Vinod Nair, Head of Research at Geojit Financial Services.
Unmesh Kulkarni, Managing Director Senior Advisor, Julius Baer India, said the RBI has struck a surprisingly dovish chord in this policy announcement.
“Citing downside risks to the economy from the Omicron wave, it is focusing more on ensuring a strong economic recovery rather than fighting inflation. The RBI is somewhat not too focussed on the global concerns over inflation, rise in global interest rates, and the high global oil prices…
“A key ponderable in the near-term for the markets would be how the RBI will manage the escalated borrowing in the next year and maintain an orderly yield curve,” he added.
Barring capital goods, all BSE sectoral indices logged gains, led by power, metal, bankex, finance, utilities and IT.
The BSE midcap and smallcap gauges rose up to 0.30 per cent.
World stocks were steady ahead of crucial US inflation data which will provide cues on the pace of policy tightening by the Federal Reserve.
In Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo ended with modest gains.
Stock exchanges in Europe too were in the positive territory in the afternoon session.
Meanwhile, international oil benchmark Brent crude inched up 0.08 per cent to USD 91.62 per barrel.
The rupee declined by 10 paise to close at 74.94 against the US dollar on Thursday.
Foreign institutional investors (FIIs) remained net sellers in the capital market as they sold shares worth Rs 892.64 crore on Wednesday, according to stock exchange data. PTI BAL ABM ABM ABM