Sunday, December 22, 2024 | 11:57 PM ISTEN Hindi

Sensex snaps 3-day losing run on RBI policy, rises 412pts up; yields up 2%

CLOSING BELL: The RBI also announced revised inflation and GDP growth forecasts in-line with market expectations

SI Reporter New Delhi

MARKET LIVE: Sensex off highs, up 350 pts; IT stocks slip, metals rally

CLOSING BELL

Benchmark indices snapped their three-day losing run and settled 0.8 per cent higher on Friday. Investors heaved a sigh of relief as the Reserve Bank of India decided to keep the interest rates unchanged and maintainee 'accommodative' stance despite liquidity unwinding by global central banks. The RBI also announced revised inflation and GDP growth forecasts in-line with market expectations. Yields on 10-year bonds, however, hit multi-year high of 7.075, inching up 2.3 per cent.

Againt this backdrop, the S&P BSE Sensex climbed 571 points from the day's low to end at 59,447, up 412 points against Thursday's close. The NSE Nifty, too, advanced 145 points to settle at 17,784 in a broad-based rally. Both the indices had hit intra-day highs of 59,654 and 17,843, respectively.

The broader BSE MidCap and SmallCap indices rose in tandem with the frontline indices and closed 0.9 per cent higher each.

Among individual stocks, ITC ended as the top gainer as it advanced 4.7 per cent on the Sensex index. The stock of the cigarettes to fast moving consumer goods (FMCG) major has rallied 24 per cent in the past six week. READ MORE

That apart, Dr Reddy's Labs, M&M, Tata Steel, Titan, Reliance Industries, Asian Paints, Nestle India, and IndusInd Bank were the other gainers, rising upwards of 1.5 per cent each.

On the downside, only Tech M, NTPC, Maruti Suzuki, Sun Pharma, and HCL Tech were the laggards, down up to 1.2 per cent.

Sectorally, the Nifty Metal index was the biggest gainer, rising 2 per cent. Meanwhile, the Nifty IT index ended wee bit in the red.

RBI Policy Highlights

Reserve Bank of India's (RBI) six-member monetary policy committee (MPC) on Friday voted unanimously to keep the policy repo rate unchanged at 4 per cent and decided to remain accommodative but focus on withdrawal of accommodation to ensure inflation remains within the target while also supporting growth.

With the volatile external environment due to the geo-political situation in eastern Europe posing a downside risk to downside risks to domestic growth and upside risk to inflation projections, the RBI has revised its inflation projection upwards and sharply cut its growth projections for the economy in the current financial year. READ MORE

Global markets

World shares gained on Friday as investors assessed the pace of the Federal Reserve's monetary tightening plans and news from Ukraine. Japan's Nikkei and South Korea's Kospi ended 0.4 per cent and 0.17 per cent higher, respectively, while the pan-European Stoxx 600 index jumped 1.1 per cent.

On Wall Street, futures linked to main indices wereup 0.2 per cent each.

4:11 PM

Technical View: Rupak De, Senior Technical Analyst at LKP Securities

The benchmark Nifty found support around the previous session's low resulting in a positive close for the day. However, on the higher end, the Nifty found resistance around the lower band of the rising channel. Going forward, the trend may continue over the near term. On the higher end, the index may find resistance at 18000 whereas, on the lower end, support exists at 17650.

4:09 PM

Market view: Vinod Nair, Head of Research at Geojit Financial Services

Market was cautious during the last 2-3 days ahead the RBI meet and its future policy stance. Measures being in-line with market expectations led to a relief rally. The focus has shifted to the Q4 earnings season, which will start next week, initiated by the IT & Banking sector. Outlook for the banking sector is robust due to rapid bounce in credit growth & improvement in balance sheet while preview for IT is mixed as Q4 is seasonally weak.

4:07 PM

European markets trade on a positive note

4:04 PM

Analyst takeaway: RBI's robust forex reserves to cushion against geo-political tensions

The MPCs decision to maintain its status quo is in line with expectations. RBI has emphasized on the strong buffers of forex reserves, which may act as a cushion amidst geopolitical tensions and exchange rate volatility. The reaction of the market on the downward revision in growth rate to 7.2% and an upward revision in inflation rate to 5.7% is to be kept an eye on. It will also be interesting to see how the economy tackles its supply side constraints to mitigate the inflationary pressures.

Views expressed by Mr. Shivam Bajaj, Founder & CEO at Avener Capital

4:01 PM