Mumbai, April 5 (PTI): Benchmark Sensex shot up 577 points today after the RBI kept the policy rate unchanged but said growth will rebound this fiscal amid softening inflation.
Equities were also buoyed by favourable global trends after the US indicated it was open to negotiations in its trade dispute with China, easing fears of a full-blown trade war.
A string of positive domestic cues, including forecast of a normal monsoon and encouraging services sector PMI data, added to the buying momentum, brokers said.
The Reserve Bank kept the repo rate unchanged at 6 per cent as widely expected but lowered retail inflation projection to 4.7-5.1 per cent for the first half of the fiscal.
It also said India’s economic growth rate is expected to strengthen to 7.4 per cent in the current financial year, from 6.6 per cent in 2017-18, on account of revival in investment activity.
The BSE Sensex, which opened strong at 33,289.96, surged to the session’s high of 33,637.46 soon after the RBI’s policy announcement, before finally ending at 33,596.80, up 577.73 points, or 1.75 per cent.
This was its biggest single day gain since March 12 when it had rallied 610.80 points. The gauge had lost 351.56 points in the previous session.
On similar lines, the NSE Nifty, after shuttling between 10,331.80 and 10,227.45, finished the day 196.75 points, or 1.94 points higher at 10,325.15.
Rate sensitive stocks were at the forefront of the rally after the RBI eased NPA provisioning norms for banks.
The BSE Banking index surged 2.78 per cent as shares of state-run SBI rose 4.66 per cent, followed by ICICI Bank 3.52 per cent, Kotak Bank 3.38 per cent, Axis Bank 2.65 per cent, IndusInd Bank 2.52 per cent and Yes Bank 2.36 per cent.
“Market rallied owing to ease in global trade anxiety and RBI’s stance on cut in inflation to 4.7-5.1% in H1FY19 due to sharp moderation in food prices and expectation of normal monsoon.
“Policy was in consonance with the neutral stance and limited the chances of rate hike in the near term due to favourable domestic triggers and consequent decline in yield. On the other hand, volatility in oil price and rising interest rates globally may influence central bank to remain on hold,” said Vinod Nair, Head of Research, Geojit Financial Services.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth Rs 335.18 crore on net basis, while domestic institutional investors (DIIs) sold equities to the tune of Rs 152.55 crore yesterday, provisional data showed.
Other gainers in the Sensex pack were Tata Steel, L&T, Adani Ports, Infosys, HUL, TCS, NTPC, Wipro, RIL, Sun Pharma, HDFC Ltd,ONGC and Dr Reddy’s, rising up to 3.67 per cent.
The rate-sensitive auto index ended 1.76 per cent higher, with Hero MotoCorp, Tata Motors, M&M, Maruti Suzuki and Bajaj Auto rising by up to 3.11 per cent.
In other sectoral indices, Metal rose 4.14 per cent, realty 2.55 per cent, PSU 2.19 per cent, consumer durables 1.85 per cent, capital goods 1.83 per cent, infrastructure 1.82 per cent, IT 1.55 per cent, teck 1.44 per cent and oil & gas 1.26 per cent.
The rally extended to the broader markets as well, lifting the mid-cap index by 1.88 per cent and small-cap 1.87 per cent.
In the Asian region, Japan’s Nikkei ended 1.53 per cent higher, while Singapore gained 1.97 per cent. Hong Kong and Shanghai markets were shut today for a public holiday.
In the Eurozone, Frankfurt’s DAX gained 1.80 per cent and Paris CAC advanced 1.73 per cent in early deals. London’s FTSE too was up 1.29 per cent.
