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The benchmark BSE Sensex ended the session higher by nearly 180 points as the RBI's decision to keep repo rate unchanged at 6.0 per cent was in line with investor expectations in view of upward trend in inflation.
The 30-share BSE index Sensex ended higher by 174.33 points or 0.55 per cent at 31,671.71 and the 50-share NSE index Nifty closed up 55.4 points or 0.56 per cent at 9,914.90. The Sensex hit a high of 31,752.16 and a low of 31,457.78.
Among BSE sectoral indices, healthcare index gained the most by 1.83 per cent, followed by FMCG 1.57 per cent, oil & gas 1.28 per cent and PSU 0.66 per cent. On the other hand, metal index was down 0.24 per cent, TECk 0.23 per cent, IT 0.17 per cent and consumer durables 0.1 per cent.
Top five Sensex gainers were Sun Pharma (+2.98%), Reliance (+2.61%), ITC (+2.3%), Kotak Bank (+2.16%) and Dr Reddy's (+1.99%), while the major losers were Bharti Airtel (-2.26%), ICICI Bank (-0.88%), HDFC Bank (-0.66%), Axis Bank (-0.63%) and Maruti (-0.58%).
RBI maintains status quo
Markets were expecting the Monetary Policy Committee to vote for a status quo on the rates at the policy announcement. They also felt that with inflation rising, the RBI is at the end of its rate cutting cycle and may cut it once at best during the remainder of the fiscal.
The review comes amid a heightened fears of a slowdown in growth due to various factors like the demonetisation exercise and the introduction of the indirect taxation reform GST and a shrill call for fiscal boosters from a varied section of economists.
The central bank has, however, slashed the statutory liquidity ratio or the percentage of deposits that banks have to park in government securities, by 0.50 per cent to 19.50 per cent. The move is expected to raise buoyancy in the loans market as banks will have slightly higher funds for lending.
Investor sentiment also got a boost after the eight core sectors recorded a five-month high growth rate of 4.9 per cent in August, helped by robust performance of coal, natural gas and electricity.
Asian shares
Japanese shares climbed on Wednesday led by auto stocks as US demand for cars ballooned following damage from recent hurricanes, while the dollar traded cautiously amid speculation over the next head of the Federal Reserve.
Across Asia this week, trade has been generally subdued and volumes thin with China and South Korea closed for week-long holidays and analysts cautioning against reading too much into index moves.
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