RBI Measures Lifts D-Street Mood

The domestic equity benchmarks on Wednesday, May 5 cheered the RBI Governor's announcement on measures to provide liquidity windows and loan repayment relief. Strong buying interest in Financial and IT stocks led the BSE Sensex to close higher by 424.04 points at 48,677.55, while the Nifty-50 closed higher by 121.40 points at 14,617.90.

"Traders were relieved when RBI Governor Shaktikanta Das stated that the central bank will continue to track the evolving COVID-19 situation and will deploy all tools and instruments at its disposal to assist people, businesses, and institutions affected by the second wave," said Gaurav Garg of CapitalVia Global Research Limited.

The banking index climbed over 500 points in the day's trade post the Governor's address. Kotak Mahindra, IndusInd Bank, and Axis Bank were the top gainers in the 30-share pack as they surged over two per cent each. Sun Pharma stood as the top index gainer after it added over five per cent in the day's trade on Wednesday.

Analysts said that the additional relief was quite necessary from the centre post the resurgence in the Covid-19 cases in the country and this will further support the funding requirements of various sectors and provide a back to MSMEs and individuals.

Nish Bhatt, Founder & CEO of Millwood Kane International, said, "The measures announced will support the funding requirements of the healthcare, medical facilities, beef-up vaccine manufacturing for domestic inoculation. MSMEs and individuals borrowers will benefit from the extension in the moratorium."

Tracking the sectors, barring realty, all other sectors witnessed buying interest which led the markets to close on a positive note despite concerns over rising cases in the country and even after the rating agencies downgrading their growth projections for FY'22. The Pharma sector was the top contributor as it gained over four per cent led by shares of Lupin (+13.47 per cent), and Aurobinda Pharma (+6.43 per cent).

The broader markets outperformed too as the BSE Midcap added over a per cent, while the Smallcap index climbed 167 points at the market closing. JSW Energy and BHEL were top gainers in the Midcap space as they advanced 8-9 per cent each.

Amid the volatility witnessed in the April series, the broader markets have managed to outperform as the Midcap index gained 2.5 per cent, while the Smallcap added nearly six per cent in the month.

In the overall market breadth on Wednesday, the bulls dominated the D-Street as 1794 shares closed with gains, while 1084 shares declined.