Market Gets RBI Lift, Closes Up For 4th Day
Stocks ended in positive territory today underpinned by rate-sensitive realty and banking shares after the Reserve Bank decided to hold rates in line with expectations.
Domestic institutional investors played sheet-anchor for the market, which rallied for the fourth straight day.
According to traders, the RBI's decision to keep the interest rate on hold is in sync with investor expectations.
A strengthening rupee, which breached the 65 level against the dollar during the day, pepped up mood.
The BSE Sensex ended up 174.33 points, or 0.55 per cent, at 31,671.71. The gauge had gained 337.57 points in the previous three sessions.
The NSE Nifty followed suit and regained the key 9,900- mark before closing up 55.40 points, or 0.56 per cent, at 9,914.90.
The RBI, in its fourth bi-monthly policy review for 2017 -18, kept the repo rate unchanged at 6 per cent. Reverse repo has been retained at 5.75 per cent.
"Other than recapitalisation of PSU banks, there was nothing new in the RBI policy, rather than acknowledgement of reduction in GVA and increase in inflation. But this time, the commentary is not as hawkish, which provides room for a rate cut by the end of the year," said Vinod Nair, Head of Research, Geojit Financial Services Ltd. "Market is unlikely to react much to the event and move on with the factors like domestic Q2 earnings season and global liquidity."
Risk sentiment received a boost after eight core sectors grew to a five-month high of 4.9 per cent in August, helped by robust show of coal, natural gas and electricity.
Domestic institutional investors (DIIs) stayed on with the India story as they purchased shares net Rs 1,552.41 crore. But cracks remained in the form of share outflow from foreign portfolio investors (FPIs), who net dumped shares of Rs 693.03 crore yesterday, showed provisional data. Rate-sensitive financial stocks were on the buy list. State-owned SBI rose 0.82 per cent to Rs 253.35 while Kotak Mahindra Bank was up 2.16 per cent at Rs 1,028. In the Sensex bloc, Sun Pharma hit pay dirt jumping the most by 2.98 per cent. Reliance Industries, ITC Ltd, Dr Reddy's and M&M too turned green.
However, Bharti Airtel fell big, down 2.26 per cent.
In sectoral matrix, healthcare advanced 1.83 per cent, followed by FMCG, oil and gas, PSU, realty and banking.
The broader markets too showed a higher trend, with BSE small-cap and mid-cap indices surging up to 0.79 per cent. Most other Asian indices closed higher. Chinese stock exchanges remained shut today for a public holiday. Europe offered a mixed picture. PTI SUN DP KPS SDG ARD
