Sensex Crosses 45,000 Mark After RBI Raises GDP Projection

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FILE PHOTO: People walk past the Bombay Stock Exchange (BSE) building in Mumbai, India, November 4, 2020. REUTERS/Francis Mascarenhas/File photo

Domestic stock markets surged to record highs on Friday, after the Reserve Bank of India left key lending rates unchanged as expected but raised its forecast for the country’s GDP. The S&P BSE Sensex index jumped 515.63 points, or 1.16 per cent, to touch an all-time high of 45,148.28, and the broader NSE Nifty 50 benchmark surged to a record 13,280.05, gaining 146.15 points, or 1.11 per cent, from its previous close. A surge in global shares on optimism around the development of COVID-19 vaccines and world economic recovery also boosted investor sentiment.

  1. The Sensex ended 446.90 points or 1.00 per cent higher at 45,079.55 and the Nifty rose 124.65 points or 0.95 per cent to settle at 13,258.55 — both record closing highs. 
  2. Adani Ports, ICICI Bank, Hindalco, UltraTech Cement, Sun Pharma, closing between 4.01 per cent and 4.86 per cent higher, were the top gainers in the Nifty basket of 50 shares. 
  3. On the other hand, Reliance Industries, HDFC Life, Bajaj Finserv, Bharat Petroleum and HCL Tech – down 0.49-0.83 per cent each – were the worst ahit among 11 laggards in the index. 
  4. ICICI Bank, HUL, Bharti Airtel and HDFC Bank were the biggest contributors to the gain in Sensex.
  5. The RBI kept key interest rates steady as widely expected on Friday amid persistently high inflation, and after a better-than-expected reading on economic growth.
  6. RBI Governor Shaktikanta Das said the country’s prospects have brightened with progress on COVID-19 vaccines, consumer confidence has turned positive and projected real GDP for the current financial year to contract just 7.5 per cent.
  7. The upward revision in GDP projections, from 9.5 per cent in October, comes days after official data showed the country’s GDP shrank at a better-than-expected 7.5 per cent in the July-September period, from a record 23.9 per cent slump in the previous quarter.
  8. Analysts say the latest RBI policy reinforces optimism on a fast economic revival after months of slowdown caused by the coronavirus pandemic. 
  9. “An accommodative liquidity stance will ensure access to liquidity will not be a challenge and the ongoing recovery continues to gather steam. This will help push through govt borrowings in a year where the revenues are under pressure. Guidance is better than earlier on growth and flows. Positive for markets,” said Ashish Shanker, deputy managing director and head of investment at Motilal Oswal Private Wealth Management.
  10. Asian shares scaled a record high on growing prospects of a large US economic stimulus package, while hopes that coronavirus vaccine rollouts will boost the global economy underpinned investor sentiment. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.78 per cent, surpassing its November 25 peak, while Japan’s Nikkei dipped 0.22 per cent on profit-taking.