The equity benchmark index Sensex rallied 327 points on Friday, extending gains for the seventh straight session on the back of financial stocks after the RBI left the benchmark rate unchanged but decided to maintain an accommodative stance.
RBI Governor Shaktikanta Das’ comments on expectation of Gross Domestic Product (GDP) turning positive in the January-March quarter of the current financial year also fuelled the market rally, traders said.
The Sensex ended 326.82 points, or 0.81 per cent higher, at 40,509.49, while the broader NSE Nifty rose by 79.60 points, or 0.67 per cent, to 11,914.20.
ICICI Bank was the top gainer in the Sensex pack, rising around 3 per cent, followed by Axis Bank, HDFC twins, SBI, L&T, ONGC, and Infosys.
On the other hand, Sun Pharma, Asian Paints, Nestlé India, UltraTech Cement, and HUL declined.
Rate-sensitive banking and financial stocks ended on a positive note, with BSE bankex and finance rising up to 2.64 per cent, while realty and auto indices closed in the red.
While announcing the MPC decisions, RBI Governor Shaktikanta Das said the benchmark repurchase (repo) rate has been left unchanged at 4 per cent.
Consequently, the reverse repo rate will also continue to earn 3.35 per cent for banks for their deposits kept with RBI.
Das said the Indian economy is entering into a decisive phase in the fight against coronavirus.
He also stated that the contraction in economic growth witnessed in the April-June quarter of the fiscal is “behind us”, adding that the GDP was likely to turn positive at 0.5 per cent in the January-March quarter of the current financial year.
The policy review outcome was as per expectations, but it was the good commentary on GDP outlook and the liquidity measures announced that cheered the D-Street, said Jimeet Modi, Founder and CEO of Samco Group.
“The central bank has given forecast of 9.5 per cent contraction in GDP this fiscal but the silver lining lies in the expectations of GDP growth possibly turning positive by January-March quarter (Q4),” said Gaurav Dua, SVP, head— capital market strategy & investments, Sharekhan by BNP Paribas.
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First Published: Sat, October 10 2020. 00:51 IST
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