Sensex Gains As RBI Holds Rates; Bank Nifty Rises To Record
Indian shares closed higher, led by gains in rate sensitive sectors such as financials and automakers after the central bank kept interest rates unchanged at a policy meeting, as widely expected.
The Reserve Bank of India left repo and reverse repo rates unchanged at 6.25 percent and 6 percent, respectively and lowered its inflation estimates for the current financial year.
We believe that further policy action may be more data driven – and to that extent case for rate cut is not ruled out.Lakshmi Iyer, CIO (Debt) & Head - Products, Kotak Mutual Fund
The S&P BSE Sensex rose 0.26 percent to 31,271 while the NSE Nifty advanced 0.28 percent to 9,663.
Indian rupee rose 8 paise to 64.36 against the U.S. dollar, compared with its previous close of 64.43. The partially convertible currency is poised for its highest close since May 17.
In the bonds market, yield on the newly-issued 6.79% bonds due May 2027 dropped five basis points to 6.59 percent following the decision.
Among the sectoral indices, S&P BSE Bankex rose 0.73 percent while the S&P BSE Metal index gained nearly 1 percent.
The market breadth was skewed in the favour of gainers, with about 5 stocks advancing to every 4 stocks that declined.
- Sensex +0.25% at 31,265 vs 31,202 before policy
- Nifty +0.24% at 9,659 vs 9,639 before policy
- Rupee at 64.315 against the U.S. dollar vs 64.396 before policy
- Benchmark 10-year bond yields at 6.648 basis points vs 6.635% earlier
RBI Policy Analysis With BloombergQuint
RBI Keeps Rates Unchanged, As Expected
- Benchmark repurchase rate at 6.25% (Estimate 6.25%)
- Reverse repo rate at 6.00% (Estimate 6.00%)
- Says monetary policy stance neutral
- The central bank was expected to leave repurchase rate unchanged, according to all 10 economists in BloombergQuint survey