Mumbai: Indian markets surged over 1% in early trade on Thursday amid mixed Asian markets, after Reserve Bank of India (RBI) kept interest rates unchanged
At 10.57am, the 30-share Sensex index rose 1.30%, or 442.30 points, to 34,525.01, while Nifty 50-share index gained 1.18%, or 123.20 points to 10,599.90.
Market breadth was extremely positive with gainers turning out to be five times the number of losers on the BSE. Twenty five of 30 Sensex stocks traded higher. Software exporter Infosys Ltd contributed the most to the gains for Sensex with a 3.12% rise.
RBI on Wednesday left its policy rates unchanged at 6% and maintained its policy stance to neutral despite fiscal slippages for FY18, higher international crude oil prices and sell-off globally due to fear of hike by the US Federal Reserve.
“Although the policy outcome has been largely on expected lines, the degree of hawkishness in the policy has provided the markets a breather,” said Edelweiss Securities in a note to its investors.
RBI projected an inflation range of 5.1-5.6% in the first half of 2018-19 on the back of higher international crude oil and raw material prices. However, RBI eased the inflation forecast to 4.5-4.6% for the second half of FY18 on the back of softness in food inflation assuming normal monsoon.
Five members of the monetary policy committee (MPC) panel voted to keep rates unchanged, while Michael Patra, executive director at the central bank, wanted to raise rates by 25 basis points. A basis point is one-hundredth of a percentage point.
“Overall, the policy is supportive of growth with inflation trajectory expected to taper off over the second half providing a stable environment for growth. Further policy action will be based on inflation and growth trajectory over the next few months,” said Shanti Ekambaram, president – consumer banking, Kotak Mahindra Bank.
Investors will keep an eye on key Consumer Price Index (CPI) and Index of Industrial Production (IIP) data for January and December, respectively, on 12 February.livemint