Comments
The BSE Sensex, a key barometer of India’s stock markets, scaled the 45,000 mark on Friday. The exuberance it has witnessed in recent days comes on the back of massive buying of stocks by foreign portfolio investors (FPI). Covid-related nervousness has been discounted by the street in India as well in the global stock markets.
On Friday, more than 400 stocks hit the upper circuit as investors rushed to buy even small and mid-cap counters.
The Sensex closed at 45,079 points after gaining 446 points, or 1 per cent. The broader index Nifty gained 0.95 per cent, or 124 points, to reach 13,258.
The RBI move to keep key rates unchanged was also cheered by the market.
PSU stocks including GAIL, HPCL and BPCL have witnessed a strong rally in the past couple of trading sessions. This is on the back of a rise in global crude oil prices and Brent oil touching $50/barrel.
Stocks of companies related to the commodity market including metals and mining are zooming in line with a global price rally.
RBI policy meet
Earlier in the day, the Reserve Bank of India (RBI) left interest rates unchanged for the third straight time amid persistently high inflation. Still, it said the economy was recuperating fast and would return to positive growth in the current quarter itself.
The central bank now expects a milder 7.5 per cent contraction in the fiscal year to March 2021 as opposed to its October forecast of a 9.5 per cent shrinkage of the GDP.
Rate-sensitive banking, financials, realty and auto stocks rallied after the policy announcement.
ICICI Bank was the top gainer in the Sensex pack, spurting 4.20 per cent, followed by UltraTech Cement, Sun Pharma, Bharti Airtel, HUL, SBI, L&T, Axis Bank and IndusInd Bank.
On the other hand, Reliance Industries, Bajaj Finserv, HCL Tech, HDFC and NTPC closed in the red, slipping up to 0.86 per cent.
During the holiday-truncated week, the Sensex rallied 929.83 points or 2.10 per cent, while the Nifty jumped 289.60 points or 2.23 per cent.
“RBI’s decision to keep policy rates unchanged and maintain an accommodative stance for the current and upcoming year is well taken by the market. The possibility for a further rate cut in the near term can be ruled out considering the elevated levels of inflation.
“However, positively RBI has ensured ample liquidity support on a timely basis in the form of open market operation, TLTRO and reverse repo. Globally, renewed US stimulus negotiation and vaccine roll-out has underpinned optimism, this will help the domestic market to maintain its euphoria,” said Vinod Nair, Head of Research at Geojit Financial Services.
Sector-wise, the BSE bankex, telecom, consumer durables, FMCG, metal, industrials, finance and realty indices climbed up to 2.14 per cent, while energy ended with losses.
Broader BSE midcap and smallcap indices advanced up to 0.44 per cent.
The RBI’s Monetary Policy Committee (MPC) “decided to continue with the accommodative stance of monetary policy as long as necessary - at least through the current financial year and into the next year,” Governor Shaktikanta Das said.
The central bank’s stance is “to revive growth on a durable basis, and mitigate the impact of Covid-19 while ensuring that inflation remains within the target going forward,” he added.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.