Equity benchmark Sensex surged over 300 points in morning trade on Wednesday after the Reserve Bank of India left interest rates unchanged and maintained an accommodative stance to support economic growth.
The 30-share BSE index climbed 308.84 points or 0.63 per cent higher at 49,510.23, and the broader NSE Nifty advanced 94.85 points or 0.65 per cent to 14,778.35.
Nestle India was the top gainer in the Sensex pack, rising over 2 per cent, followed by Bharti Airtel, Reliance Industries, Asian Paints, SBI, IndusInd Bank and Dr Reddy’s.
On the other hand, TCS, HCL Tech, Tech Mahindra, Axis Bank and HDFC Bank were among the laggards.
The central bank kept the benchmark repurchase rate unchanged at 4 per cent and maintained an accommodative policy stance to support growth.
RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) kept its estimate for economic growth unchanged at 10.5 per cent for the current fiscal.
“The monetary policy announcement is on expected lines without changes in policy rates and stance,” VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
However, reading between the lines, one can conclude that the stance is more dovish than expected with the governor reinforcing the central bank's commitment "to remain accommodative to support and nurture the recovery as long as necessary", he said.
Bond market
The bond market has taken the announcement positively with the 10-year yield moving to 6.12 per cent.
"The governor's assurance to ensure an orderly evolution of the yield curve also is confidence-inspiring," he noted.