Business Standard

Volume IconMarket wrap: Sensex gains 2,000 pts in two days as markets cheer RBI stance

Fitch increases FY23 GDP growth forecast to 10.3%; Shriram Properties IPO nearly sales through on day 1

ImageBS Web Team New Delhi
markets

Illustration by Binay Sinha

Top headlines
·        Markets cheer RBI's dovish stance; Sensex leaps 1,016 pts, Nifty reclaims 17,450
·        RBI keeps repo rate unchanged; flags global risks to the economy
·        Fitch increases FY23 GDP growth forecast to 10.3%
·        Shriram Properties IPO nearly sales through on day 1
 
Market bulls extended their winning ways on the bourses on Wednesday after the Reserve Bank of India delivered a policy statement on expected lines. The BSE Sensex closed today's session at 58,650, up 1,016 points, while the Nifty50 zoomed past the 17,450 mark to end at 17,469. Both indices were up 1.7 per cent each.
 
In broader markets, the MidCap and SmallCap indices climbed between 1.3 per cent and 1.5 per cent on the BSE.
 
The monetary policy committee of the Reserve Bank of India on Wednesday kept the repo unchanged at 4% for a ninth straight policy meeting and maintained an accommodative stance amid growing uncertainties around the Omicron variant of coronavirus.
 
While the Indian economy had lifted itself out of its deepest contraction and was better prepared to deal with Covid-19, it was not immune to global spillovers or to a possible surge in infections from new mutations of the coronavirus, Governor Shaktikanta Das said.
 
Therefore, given a slack in the economy, especially of private consumption, which was still below its pre-pandemic level, continued policy support was warranted for a durable and broad-based recovery, he added.
 
As regards liquidity, the RBI had decided to enhance the 14-day VRRR auction amounts – Rs 6.5 trillion on December 17 and Rs 7.5 trillion on December 31. Further, liquidity absorption will be undertaken mainly through the auction route from January 2022 onwards.
 
Apart from the less-than-expected hawkish policy, what also bolstered investor confidence on Wednesday was an upward revision of the GDP growth forecast for FY23 by Fitch Ratings.
 
According to the agency's Global Economic Outlook report, India's GDP growth momentum should peak in FY23, at 10.3 per cent, boosted by a consumer-led recovery and the easing of supply disruptions.
 
Overall, the markets witnessed an across-the-board buying with all key sectoral indices ending in the green. The Nifty Auto and PSB indices rallied around 2.5 per cent each, followed by nearly 2 per cent gains in the Nifty Bank, Financial Services, IT, Realty, and Metal indices.
 
Meanwhile, in the primary market, the 600-crore-rupee IPO of Shriram Properties had been subscribed 75 per cent as at 3:45 PM, with nearly 4 times subscription of the retail portion.
 
The public offer of RateGain Travel Technologies, meanwhile, has so far been subscribed 62 per cent on the second day of the issue.

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First Published: Dec 08 2021 | 6:26 PM IST