The announcement of interest rate cut by RBI on Friday and positive signals from Putin’s visit to India gave tremendous strength to the domestic stock market. Due to improvement in investor sentiment, at the end of trading, BSE Sensex jumped 447.05 points to close at 85,712.37, while Nifty also closed at 26,186.45 with a strong jump of 151.7 points. In fact, the Monetary Review Committee led by the Reserve Bank of India i.e. RBI has reduced the policy interest rate i.e. repo rate by 0.25 percent on Friday.
There was upheaval in these sectors
In broader markets, the Nifty Midcap index rose 0.49 per cent, while the Nifty Smallcap index slipped 0.57 per cent. Nifty PSU Bank was the leader in the sectoral index with a gain of 1.5 percent. Apart from this, Bank, Auto, IT, Metal, Realty, Oil & Gas and Chemicals indices also closed in the green. On the other hand, Media, Pharma, Consumer Durables and FMCG indices ended the day in the red.
State Bank of India, Bajaj Finserv, Maruti Suzuki, Bajaj Finance and HCL Tech were the top gainers on the Sensex. Hindustan Unilever, Eternal, Trent, Sun Pharma, Tata Motors PV and Bharat Electronics emerged as major losers.
Expert opinion
Vinod Nair, Head of Research, Geojit Investments Ltd, said Indian markets have responded enthusiastically to the RBI’s sudden 25 basis point or 0.25 per cent rate cut, a move that seemed unlikely given the strong second quarter GDP data. This surprise, combined with sharply lower inflation expectations and supportive liquidity measures, has boosted risk-on sentiment in equities. Rate-sensitive sectors like auto, real estate and NBFC are leading the gainers due to reduction in costs.
Trends in global markets and crude oil
In Asian markets, South Korea’s Kospi, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index closed at positive levels, while Japan’s Nikkei 225 index ended with a decline. Trading in European markets continued at a high level. US markets closed flat on Thursday. Brent crude, the global oil benchmark, rose 0.16 percent to $63.36 a barrel.
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