Fin stocks hog limelight on RBI rate hike pause
Sensex, Nifty rise for 5th consecutive session; Buying in RIL, banking and financial shares offset losses in IT, power and FMCG stocks amid weak global cues; Sensex, Nifty surged 2,219 pts or 3.73% and 647 pts or 4.21% respectively in 5-day rally; No trading today for Good Friday
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Mumbai: Benchmark indices Sensex and Nifty continued their winning run for the fifth day on Thursday as RBI’s surprise policy move to pause rate hikes boosted buying in interest rate-sensitive stocks.
Gains in index majors HDFC twins and Reliance Industries (RIL) helped offset losses in IT, Power and FMCG stocks amid weak global trends. Bouncing back from early fall, the 30-share BSE Sensex rose by 143.66 points or 0.24 per cent to settle at 59,832.97. During the day, it advanced 260.75 points or 0.43 per cent to 59,950.06. The broader NSE Nifty gained 42.10 points or 0.24 per cent to finish at 17,599.15 after falling in initial trade.
After raising interest rate by a cumulative 250 basis points in 11 months, the RBI unexpectedly kept benchmark rate unchanged as global banking woes added uncertainty to the economic outlook. RBI Governor Shaktikanta Das, however, pledged to hike interest rate again if needed, saying the decision to pause was for this meeting only. Most analysts had expected one final hike of 25 basis points in RBI’s current tightening cycle before hitting a pause.
“RBI’s pause is like Sachin stroke on a tricky pitch, but with eyes set in and having the luxury of hitting the ball where ever he wanted. RBI had the option of a rate hike or a pause. The pause was not entirely unexpected.
“RBI will watch developments and data before taking the next call. The market expects RBI to fetch maximum run and win the match on inflation and growth, no matter which direction they hit the ball,” said Nilesh Shah, MD, Kotak Mahindra Asset management Company Ltd.
“RBI surprised the market by pausing policy rates; nonetheless, there was some talk about this unexpected statement, which keeps it ahead of other major central banks across the world. The market is in a good mood, and this policy provides us with further cause to rejoice. However, given that we have witnessed a good recovery from recent lows and that we have a long weekend and a weekly expiry, some profit-taking or consolidation cannot be ruled out,” said Santosh Meena, head (research), Swastika Investmart Ltd.
