The BSE Sensex surged over 550 points on Wednesday morning, surpassing the 82,000 mark, following the Reserve Bank of India’s (RBI) shift in monetary policy to a ‘neutral’ stance, sparking expectations of a potential rate cut in upcoming policies.
In early trading, the 30-share BSE Sensex gained 556.97 points, or 0.68%, reaching 82,191.78, while the NSE Nifty climbed 78.70 points, or 0.31%, to 25,091.85.
Traders attributed the market’s positive momentum to strong buying in banking and IT stocks. State Bank of India, Axis Bank, Bajaj Finance, Tata Motors, Bharti Airtel, PowerGrid, and HCL Technologies emerged as top gainers among Sensex components. On the other hand, Nestle India, ITC, HUL, HDFC Bank, and Mahindra & Mahindra were among the laggards.
The RBI, in its tenth consecutive meeting, kept the policy rate unchanged, despite a 50-basis point rate cut by the US Federal Reserve last month and similar moves by other central banks.
RBI Governor Shaktikanta Das, unveiling the fourth bi-monthly monetary policy for this fiscal year, announced that the Monetary Policy Committee (MPC) had decided to keep the repo rate steady at 6.5%. The RBI has maintained this rate since February 2023.
Das emphasized that while India’s GDP growth remains robust, the central bank will closely monitor rising food inflation.
Suresh Darak, Founder of Bondbazaar, noted, “As expected, the RBI’s MPC opted not to adjust interest rates. While some hoped for a cut aligned with the US Fed, the RBI prioritized domestic factors like inflation and financial stability, particularly in light of the declining savings-to-GDP ratio, which could impact financial stability.”
On Tuesday, Foreign Institutional Investors (FIIs) sold equities worth ₹5,729.60 crore, while Domestic Institutional Investors (DIIs) purchased equities totaling ₹7,000.68 crore, according to data from exchanges.
In Asia, markets in Shanghai, Hong Kong, Tokyo, and Seoul showed mixed trends, while Brent Crude futures rose by 0.95% to $77.91 per barrel.
US markets also closed with gains in Tuesday’s session.
On Tuesday, the BSE Sensex closed 584.81 points higher, or 0.72%, at 81,634.81, while the NSE Nifty increased by 217.40 points, or 0.88%, to close at 25,013.15.
(With inputs from agency)
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