Equity benchmark Sensex jumped over 200 points in the morning session on Friday after the Reserve Bank of India (RBI) monetary policy announcement. RBI has decided to keep benchmark interest rate unchanged at 4 per cent but retained an accommodative stance, implying more rate cuts in the future if the need arises to support the economy hit by the COVID-19 crisis.
After announcement of the monetary policy review, the 30-share BSE index was trading 235.28 points or 0.59 per cent higher at 40,417.95, and the NSE Nifty rose 57.15 points or 0.48 per cent to 11,891.75. HDFC was the top gainer in the Sensex pack, rising around 3 per cent, followed by ICICI Bank, L&T, Bajaj Finance, HDFC Bank, Bajaj Finserv, SBI and Axis Bank.
On the other hand, Asian Paints, Tech Mahindra, HUL, Bajaj Auto and TCS were among the laggards. Rate-sensitive banking and financial stocks were trading on a positive note, with BSE bankex and finance rising up to 1.68 per cent. Realty index was also quoting gains, while auto was in the red.
According to traders, RBI’s decision was on expected lines. The benchmark repurchase (repo) rate has been left unchanged at 4 per cent, RBI Governor Shaktikanta Das said while announcing the decisions taken by the Monetary Policy Committee (MPC).
Consequently, the reverse repo rate will also continue to earn 3.35 per cent for banks for their deposits kept with RBI. Das said the Indian economy is entering into a decisive phase in the fight against coronavirus.
He also stated that the contraction in economic growth witnessed in the April-June quarter of the fiscal is ”behind us” and that silver linings are visible..