Sensex jumps 412 points after RBI policy outcome; Nifty ends at 17,784

NEW DELHI: Equity indices snapped 3-day losing streak to jump higher on Friday after the Reserve Bank of India (RBI) announced its bi-monthly monetary policy outcome.
The 30-share BSE index jumped 412 points or 0.7 per cent to close at 59,447; while the broader NSE Nifty settled 145 points or 0.82 per cent higher at 17,784.
ITC, M&M, Dr Reddy’s, Titan, Reliance and Asian Paints were the top gainers in the sensex pack rising as much as 4.36 per cent.
Whereas, Tech Mahindra, Maruti, NTPC and HCL Tech were the top losers falling up to 1.31 per cent.
On the NSE platform, sub-indices Nifty Metal, FMCG and Consumer Durables gained up to 2.07 per cent.
The Reserve Bank of India (RBI) on Friday kept borrowing costs unchanged at a record low for the 11th time in a row in a bid to continue supporting economic growth despite inflation edging higher in the aftermath of Russia’s war in Ukraine.
The panel decided to stick to an accommodative stance “while focussing on withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth”.
“Market was cautious during the last 2-3 days ahead the RBI meet and its future policy stance. Measures being in-line with market expectations led to a relief rally. The focus has shifted to the Q4 earnings season, which will start next week, initiated by the IT and Banking sector,” Vinod Nair, Head of Research at Geojit Financial Services told news agency PTI.
However, the RBI raised the 2022-23 inflation forecast by 120 basis points from February to 5.7 per cent amid risks from the Russia-Ukraine war. It also cut economic growth expectations to 7.2 per cent from 7.8 per cent.
As a first step towards policy tightening, the central bank said it would restore the width of the liquidity adjustment facility corridor to 50 basis points.
Prithviraj Srinivas, chief economist, Axis Capital told news agency Reuters that the RBI has changed its stance to “more hawkish” and the increase in inflation forecast is a bit more than expected.
“The review shows the RBI is ready to steer monetary policy out of crisis level accommodation,” Srinivas said.
The move follows nearly two years of record-low repo rate and comes against the backdrop of the US Federal Reserve and other global peers starting to raise rates to counter a price surge.
Meanwhile, foreign institutional investors offloaded shares worth Rs 5,009.62 crore on Thursday, as per exchange data.

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