Finally, BSE Sensex closed at 20,860 up 247 points, while NSE Nifty closed at 6,217 up 78 points over the previous close.
Stock market in India rallied on Wednesday snapping six day declining trend after the Reserve Bank of India surprised traders and investors by keeping rates on hold. Sentiment further got a boost as the Indian rupee also strengthened against the US dollar and was up at around Rs. 61.88 compared with previous close of Rs. 62.02 per dollar.
The rally was so strong that all the sectoral indices on the BSE ended with smart gains. The BSE Realty index was top gainer, up 2.5%, followed by BSE Capital Goods index was up 2.6%, BSE Oil and Gas index was up 2.1% and BSE Power index up 2%.
Amar Ambani, Head of Research at IIFL said, “Contrary to consensus expectation, RBI left the Repo rate unchanged at 7.75%. The MSF rate was also retained at 8.75% and thus the corridor stood unchanged at 100 basis points. Terming its decision to hold rates as a ‘close one’, RBI cited uncertainty surrounding the short-term path of inflation and weak state of the economy as the key determinants. In general, the Central bank expects inflation to moderate somewhat due to softening of vegetable prices, play out of disinflationary impact of recent exchange rate stability and persistent negative output gap (weak demand). At the same time, it remains willing to raise rates out-of-turn, if the recent inflation pressures become more generalized. Liquidity conditions have improved significantly since the normalization of exceptional monetary measures. Capital inflows under the Central bank’s swap facility for banking capital and non-resident deposits augmented domestic liquidity substantially. Consequently, bank’s borrowings under MSF have declined steeply and there has been a sharp reduction in money market rates. As RBI would continue to ensure that liquidity is available for growth, short term rates are likely to remain benign for the rest of the fiscal. While there remains a strong scope of 25 basis points rate hike in near term, it could possibly be the end of the current rate up-cycle. However, we think that monetary easing is still far away as that would demand sustained and significant moderation in inflation.”
Finally, BSE Sensex closed at 20,860 up 247 points, while NSE Nifty closed at 6,217 up 78 points over the previous close.
Barring Jindal Steel, SSLT and Ultratech Cement all the other constituents of Nifty ended in the green. BHEL, DLF, PNB, IndusInd Bank, Bajaj Auto, Tata Power, Hero Motocorp, Gail, SBI, LT and HDFC were among the top gainers in the Nifty.
The advance-decline ratio favoured the bulls. On the BSE, 1497 stocks advanced against 951 declining stocks, while 177 remained unchanged.
Stock News
Shares of Larsen & Toubro gained 3% to close at Rs. 1,095 after the company’s power transmission vertical bagged a Rs29.35bn order or setting up transmission and distribution network in Qatar.
Biocon shares surged over 12% to close at Rs 439 after the company entered into licensing and collaboration agreement with Quark Pharmaceuticals Inc for development of range of siRNA (small interfering RNA) based novel therapeutics.
Shares of Trent jumped nearly 10% on Wednesday after the UK-based retail giant Tesco filed the first multi-brand retail application seeking to invest US$110mn to open supermarkets in the country with the Tata group firm.
Shares of Tata Power surged over 4% to close at Rs. 91.5 after Tata Sons pledged 2.13 crore shares in the company to raise funds for the group. Tata Sons, the holding company of Tata Group, pledged 21,350,000 shares, amounting to 0.90 per cent stake, in Tata Power.
The rally was so strong that all the sectoral indices on the BSE ended with smart gains. The BSE Realty index was top gainer, up 2.5%, followed by BSE Capital Goods index was up 2.6%, BSE Oil and Gas index was up 2.1% and BSE Power index up 2%.
Amar Ambani, Head of Research at IIFL said, “Contrary to consensus expectation, RBI left the Repo rate unchanged at 7.75%. The MSF rate was also retained at 8.75% and thus the corridor stood unchanged at 100 basis points. Terming its decision to hold rates as a ‘close one’, RBI cited uncertainty surrounding the short-term path of inflation and weak state of the economy as the key determinants. In general, the Central bank expects inflation to moderate somewhat due to softening of vegetable prices, play out of disinflationary impact of recent exchange rate stability and persistent negative output gap (weak demand). At the same time, it remains willing to raise rates out-of-turn, if the recent inflation pressures become more generalized. Liquidity conditions have improved significantly since the normalization of exceptional monetary measures. Capital inflows under the Central bank’s swap facility for banking capital and non-resident deposits augmented domestic liquidity substantially. Consequently, bank’s borrowings under MSF have declined steeply and there has been a sharp reduction in money market rates. As RBI would continue to ensure that liquidity is available for growth, short term rates are likely to remain benign for the rest of the fiscal. While there remains a strong scope of 25 basis points rate hike in near term, it could possibly be the end of the current rate up-cycle. However, we think that monetary easing is still far away as that would demand sustained and significant moderation in inflation.”
Finally, BSE Sensex closed at 20,860 up 247 points, while NSE Nifty closed at 6,217 up 78 points over the previous close.
Barring Jindal Steel, SSLT and Ultratech Cement all the other constituents of Nifty ended in the green. BHEL, DLF, PNB, IndusInd Bank, Bajaj Auto, Tata Power, Hero Motocorp, Gail, SBI, LT and HDFC were among the top gainers in the Nifty.
The advance-decline ratio favoured the bulls. On the BSE, 1497 stocks advanced against 951 declining stocks, while 177 remained unchanged.
Stock News
Shares of Larsen & Toubro gained 3% to close at Rs. 1,095 after the company’s power transmission vertical bagged a Rs29.35bn order or setting up transmission and distribution network in Qatar.
Biocon shares surged over 12% to close at Rs 439 after the company entered into licensing and collaboration agreement with Quark Pharmaceuticals Inc for development of range of siRNA (small interfering RNA) based novel therapeutics.
Shares of Trent jumped nearly 10% on Wednesday after the UK-based retail giant Tesco filed the first multi-brand retail application seeking to invest US$110mn to open supermarkets in the country with the Tata group firm.
Shares of Tata Power surged over 4% to close at Rs. 91.5 after Tata Sons pledged 2.13 crore shares in the company to raise funds for the group. Tata Sons, the holding company of Tata Group, pledged 21,350,000 shares, amounting to 0.90 per cent stake, in Tata Power.
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