Markets continue to trade higher post RBI policy decision

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| Photo Credit: Reuters

Equity indices continued their rally in morning trade on June 8 after the Reserve Bank of India (RBI) opted for a pause second time in a row, maintaining key benchmark policy rate at 6.5% as inflation moderates. Fresh foreign fund inflows in the domestic equity market also added to the optimism.

The 30-share BSE Sensex climbed 174.2 points to 63,317.16 in morning trade after the monetary policy announcement. The NSE Nifty advanced 49.2 points to 18,775.60.

From the Sensex pack, NTPC, Power Grid, Larsen & Toubro, HDFC Bank, IndusInd Bank, HDFC, State Bank of India, ICICI Bank, UltraTech Cement, Tata Steel and Reliance Industries were the major gainers.

Kotak Mahindra Bank, Mahindra & Mahindra, Tata Consultancy Services, Nestle, Axis Bank, HCL Technologies, Wipro, Tech Mahindra and Hindustan Unilever were among the laggards.

The Reserve Bank of India on June 8 opted for a pause second time in a row, maintaining key benchmark policy rate at 6.5% as inflation moderates.

Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) unanimously decided to keep the rate unchanged at 6.5%.

“RBI staying on a pause and maintaining its stance was in line with expectations,” said Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities. In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong were trading lower. The U.S. markets ended mostly lower on June 7.

“The MPC maintained unchanged interest rates, as expected. The market had already factored in this policy, maintaining its bullish momentum,” Santosh Meena, Head of Research, Swastika Investmart Limited said. Global oil benchmark Brent crude dipped 0.27% to $76.74 a barrel.

Foreign Institutional Investors bought equities worth ₹1,382.57 crore on Wednesday, according to exchange data. The Sensex had climbed 350.08 points or 0.56% to settle at 63,142.96 on Wednesday. The NSE Nifty advanced 127.40 points or 0.68% to end at 18,726.40.