Mumbai: BSE benchmark Sensex rallied 163.37 points on Thursday after the Reserve Bank of India decided to keep interest rates unchanged as widely expected and said it will continue with accommodative stance.In a unanimous decision, the monetary policy committee (MPC) decided to hold policy rates at 5.15 per cent.The central bank reiterated that it will continue with its stance as long as it was necessary to revive growth, while ensuring that inflation remains within the target.
In its review, the MPC noted that even though several parameters indicate improvement in economic activity, the outlook remains subdued.The 30-share Sensex closed 0.40 per cent or 163.37 points higher at 41,306.03, while 50-share Nifty rose 0.37 per cent or 44.50 points to 12,133.65.Market at a glanceMarket breadth was in the positive territory, as advancing shares outnumbered declining ones in the ratio of 1.3:1 on BSE.Broader market put up a better show, with BSE Midcap and Smallcap indices logging 0.79 per cent and 0.56 per cent gains, respectively.Among sectoral indices, BSE Telecom and Finance led the gainers pack, as they rose 1.90 per cent and 1.18 per cent, respectively.A total of 17 Sensex stocks closed higher, with financials contributing the most to the indexs gains.Mortgage lender HDFC rose 1.82 per cent and top lender State Bank of India climbed 3.28 per cent.Realty and housing finance companies shares jumped on sops to the sectors by RBI.
Brigade Enterprises, Sobha, and Godrej Properties rose 2.85 per cent, 1.49per cent, and 2.20 per cent respectively.PNB Housing Finance and Indiabulls Housing Finance rose 5.03 per cent and 14.58 per cent respectively.In a big boost to project loans in the commercial real estate sector, RBI decided to extend the date of commencement for these loans by a year without downgrading asset classification.This move would bring these loans in lines with the treatment rendered to other project loans in the non-infrastructure sector.
The RBI is expected to issue detailed guidelines on this shortly.State-run ITI climbed 5.94 per cent after the telecom equipment maker decided to withdraw Rs 1,400 crore follow-on-public offer (FPO), citing market conditions.V-Mart Retail soared 13.38 per cent after the company posted a 40 per cent jump in December quarter profits.Avenue Supermarts scaled fresh high of Rs 2,360.75 after the DMart supermarket chain operator launched a qualified institutional placement (QIP) to raise up to Rs 4,000 crore on Wednesday.
It closed 1.64 per cent higher at Rs 2,286.20.Analysts views"Monetary policy action from RBI on rates came on expected lines, while measures to spur growth in credit came as a surprise.
Removal of CRR for loans made to specific sectors and open market operations will support the economy with more credits at lower rates.
Inflation rate is forecasted to subsequently reduce in the coming months and provide more room for RBI to cut interest rates as and when necessary, -- Vinod Nair, Head of Research, Geojit Financial ServicesGlobal marketAsian stocks extended their recovery on Thursday, cheered by record closes in Wall Street benchmarks following encouraging economic data, and after China announced a cut in tariffs on some imported goods from the United States.MSCIs broadest index of Asia-Pacific shares outside Japan jumped 1.66 per cent while Japans Nikkei rose 2.38 per cent.European shares rose to a record high on Thursday, helped by Chinas plan to cut tariffs on some United States goods and a swathe of strong earnings, Reuters reported.The pan-European STOXX 600 index rose as much as 0.7 per cent to a record high of 426.700.