RBI keeps borrowing costs unchanged for 11th consecutive day to continue supporting economic growth despite modestly rising inflation
RBI keeps borrowing costs unchanged for 11th consecutive day to continue supporting economic growth despite modestly rising inflation
The Sensex rose 412.23 points on Friday, defying strong volatility during the day, while the Reserve Bank of India maintained the benchmark interest rate status quo and bought index heavyweights Reliance Industries Limited and ITC.
The BSE Sensex rose 412.23 points, or 0.70%, to settle at 59,447.18. During the day, the benchmark hit a high of 59,654.44 and a low of 58,876.36.
The Nifty also gained 144.80 points, or 0.82%, to finish at 17,784.35.
The Reserve Bank of India (RBI) on Friday kept borrowing costs at a record low for the 11th straight day in a bid to continue supporting economic growth despite rising inflation following Russia’s war in Ukraine.
The RBI’s six-member monetary policy committee voted to keep the benchmark buyback, or repo rate, at 4%, Gov. Shaktikanta Das said.
The panel decided to maintain an accommodative stance “while focusing on unwinding accommodation to ensure future inflation remains within target while supporting growth”.
“The market has been cautious in the last 2-3 days ahead of the RBI meeting and its future policy stance. Measures that matched market expectations led to a relief rally. The focus has shifted to the fourth quarter earnings season, which will start next week, initiated by the IT and banking sectors,” said Vinod Nair, head of research at Geojit Financial Services.
The package of 30 shares included ITC, Dr. Reddy’s, M&M, Titan, Reliance Industries, Tata Steel and Asian Paints were the biggest gainers.
In contrast, Tech Mahindra, Maruti, NTPC, HCL Technologies, Sun Pharma, HDFC and HDFC Bank lagged behind.
Markets in Asia in Seoul, Shanghai, Hong Kong and Tokyo ended in the green.
Stocks in the US also closed higher in the overnight session.
International oil benchmark Brent rose 0.65% to $101.2 a barrel.
Overseas institutional investors sold ₹5,009.62 crore of shares on Thursday, stock market data showed.
“For us, the key takeaway from policymakers is that the RBI has kept its ammunition intact and is well prepared to protect the Indian economy from external shocks,” said Siddarth Bhamre, Research Head, Religare Broking Limited.
