Market HIGHLIGHTS: Domestic equity market benchmarks Sensex and Nifty ended nearly half a per cent higher after the Reserve Bank of India (RBI) maintained the key rates steady. 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. The S&P BSE Sensex ended 158 points or 0.39 per cent higher at 41,316.06 points while the broader Nifty 50 index settled at 12,133.65, up 44.50 points or 0.37 per cent.
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.
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.
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.
Supporting growth took a back seat Thursday as managing inflation forced the RBI hand to not cut repo rate for second time in a row. In the final bi-monthly monetary policy decision for FY20, the RBI maintained the key rates steady. “These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth”, RBI MPC said. In the previous policy review in December too, the rates were kept unchanged. The MPC voted 6-0 in favor of maintaining the repo rate steady. The committee had taken a pause on the repo rate cut in the last meeting owing to a surge in inflation. The retail inflation surged to 7.35 percent in December 2019 as food prices increased higher than the RBI target. A Reuters poll of economists had expected the RBI MPC to keep the repo rate at 5.15 per cent till October 2020.