Monetary policy action from the central bank on rates came on the expected line while measures to spur growth in credit came as a surprise
Domestic equity market benchmarks Sensex and Nifty ended nearly half a per cent higher after the Reserve Bank of India (RBI) monetary policy committee kept the repo rate unchanged at 5.15 per cent. “Monetary policy action from the central bank on rates came on the expected line while measures to spur growth in credit came as a surprise. Removal of CRR for loans made to specific sector and open market operations will support the economy with more credits at lower rates. The inflation rate is forecasted to subsequently reduce in the coming months and provide more room for RBI to cut interest rates as and when necessary,” Vinod Nair, Head of Research, Geojit Financial Services Ltd said.
RBI MPC keeps repo rate unchanged– The RBI MPC kept the repo rate unchanged at 5.15 per cent and said that it will continue to maintain an accommodative stance as long as it takes. The reverse repo rate was kept unchanged at 4.90 per cent. The RBI MPC, in 2019, has cut rates five times in a row by a total of 135 basis points.
Sensex, Nifty end higher for fourth day– The S&P BSE Sensex ended 163 points or 0.40 per cent higher at 41,306.03 points while the broader Nifty 50 index settled at 12,133.65, up 44.50 points or 0.37 per cent.
Bank stocks top gainer– IndusInd Bank was the top gainer on Sensex pack, with a growth of 4.92 per cent, followed by SBI (up 3.65 per cent), Bajaj Finance (up 2.98 per cent) and Bharti Airtel (2.52 per cent). On the other hand, Infosys was the top loser, down 1.71 per cent on the index. Titan, ITC, Kotak Mahindra Bank and M&M were among the other laggards on the Sensex.
Nifty sectoral indices trade mixed– Barring Nifty FMCG, Nifty IT and Nifty Realty index, all the sectoral indices ended in green. The Nifty Bank index gained 285 points driven by IndusInd Bank, RBL Bank, Bank of Baroda, SBI and Punjab National Bank. Nifty Pharma index, too, traded higher with gains in Piramal Enterprises, Divi’s Laboratories, Dr. Reddy’s Laboratories and Aurobindo Pharma.
Broader market outperforms equity benchmarks– In the broader market, S&P BSE MidCap index jumped 118 points or 0.75 per cent to close at 15,826 points while S&P BSE SmallCap index settled at 14,721 points, up 68 points or 0.46 per cent.
Markets consolidated in a range– “Markets consolidated in a range and settled in the green for the fourth successive session. The beginning was upbeat; thanks to firm Asian markets which were trading with a positive bias on the news of China reducing tariffs on some of the US goods. Sentiment further boosted as the RBI tweaked maintenance of CRR norms to aid funding to MSMEs, housing and auto sectors while the key rates remained unchanged. Traders should focus more on stock selection,” Ajit Mishra, VP – Research, Religare Broking Ltd said.
RBI’s relief for real estate– The RBI has today decided to permit extension of date of commencement of commercial operations (DCCO) of project loans for commercial real estate, delayed for reasons beyond the control of promoters, by another one year without downgrading the asset classification, in line with treatment accorded to other project loans for non-infrastructure sector. The Reserve Bank announced this in the statement on Developmental and Regulatory Policies.