The key benchmark indices continued the winning streak on third day after RBI’s Monetary Policy Committee (MPC) kept the key interest rates unchanged. At close, the Sensex was up 460.06 points or 0.79 per cent at 58926.03, and the Nifty was up 142 points or 0.81 per cent at 17605.80. About 1491 shares have advanced, 1761 shares declined, and 103 shares are unchanged.
Tata Steel, Infosys, HDFC Bank, HDFC, Kotak Bank, M&M, Power Grid, and NTPC were the top Sensex gainers today, up between 1 and 2 per cent. On the downside, Maruti Suzuki, Ultratech Cement, Nestle India, RIL, and Titan Company ended in the negative zone, down up to 1.7 per cent.
The broader indices, however, underperformed the frontline indices where the BSE MidCap and SmallCap indices closed 0.3 per cent and 0.04 per cent higher, respectively. The gains were largely broad-based on the bourses today with the Nifty Bank, Financial Services, IT, Metal, and Private Bank indices rising more than 1 per cent each. The Nifty PSB and Auto indices were the only 2 indices that ended 0.05 per cent down each.
?Contrary to many central banks, RBI acted dovish and kept interest rates unchanged with an accommodative stance. There were expectations that RBI may hike the reverse repo rate and may change its stance to neutral from accommodative in tandem with hawkish global central banks amid rising inflation. RBI believes that inflation will peak out soon and there is a need for continuous support to the economy,? said said Parth Nyati, founder, Tradingo.
Nyati added that going ahead, it will be important to see how the market will read into this as there could be a risk that RBI will remain behind the curve, which may cause inflation. That said, the overall structure looks bullish for Indian market after a recent correction. Rate-sensitive sectors like infra, real estate, auto, and financial may continue to outperform, he said.
On the bourses, shares of rate sensitives sectors like financials including banks, non-banking finance companies (NBFCs) and housing finance companies (HFCs), automobiles and real estate rallied smartly on the accomodative stance of the central bank.
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) announced its verdict after a three-day meet today. ?Market has responded positively to the policy as of now with banking stocks exhibiting strength. However, the short to medium- term trend of the market is likely to be influenced by the inflation data in US expected late tonight,? said Dr VK Vijayakumar, chief investment strategist at Geojit Financial Services
Global cues
The US indices ended with smart gains on Wednesday amid a fall in 10-year Treasury yield. Dow Jones gained 0.9 per cent, the S&P 500 jumped 1.5 per cent and Nasdaq surged 2.1 per cent. On Thursday, the markets will look for cues from inflation numbers, which analysts expect to hit a four-decade high at 7.3 per cent.
Major markets in Asia lacked direction in early trades this morning. Nikkei, Kospi and Taiwan were up – up to 0.3 per cent, while on the other hand, Hang Seng, Shanghai Composite and Straits Times were down – up to 0.3 per cent.
Oil prices, also, rose on Wednesday after US inventories reported a decline of 5 mn barrels, indicating higher demand. Brent crude futures advanced 0.9 per cent to $91.55 a barrel, and WTI crude ended 0.3 per cent up at $89.66 a barrel.
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