The Reserve Bank decision to keep policy rates unchanged and maintain an accommodative stance for the current and upcoming year boosted investor the sentiment, sending the benchmark Sensex above the 45,000 level for the first time. The 30-share index soared 447 points to close at 45,079.55 and the NSE Nifty rose 125 points to 13,258.55 on hectic buying support.
Broader markets too ended with healthy gains of 0.4 per cent and 0.5 per cent, respectively. Banking, telecom and consumer durables were top performers. The BSE Bankex shot up by 2.14 per cent. Short-term bond yields came down by 9-10 basis points.
Vinod Nair, head of research, Geojit Financial services, said, “Possibility for a further rate cut in near term can be ruled out, considering elevated inflation levels . However, the RBI has ensured ample liquidity support on a timely basis … Globally, renewed US stimulus negotiation and vaccine roll-out has underpinned optimism.”
ICICI Bank shares rose 4.2 per cent and SBI gained 2.77 per cent.
Analysts said the dovish commentary from the RBI and improved growth outlook lifted the sentiment. “With all the major events behind us, we feel global cues would dictate the market trend ahead,” said Ajit Mishra, VP—research, Religare Broking.
A section of investors attributed the current optimism to the catch-up rally being played by broader markets which are trying to match their industry bellwethers. “However, some sentimental credit for this upmove can be given to the acceptance of
Pfizer-BioNTech Covid vaccine by the UK government which would surely play a remarkable role in the concentrated efforts to overcome the pandemic,” said Nirali Shah, senior research analyst, Samco Securities.
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