Sensex rises over 200 points as RBI keeps repo rate unchanged, Nifty tops 17,600; Cholamandalam Investment, Aarti Drugs jump up to 8%

Indian equity benchmarks turned positive in Thursday's trade as the Reserve Bank of India (RBI) surprised markets by holding its key repo rate steady at 6.50 per cent after six straight hikes. The Reserve Bank said its policy stance remains focused on "withdrawal of accommodation". The pause in interest rate hike is "for this meeting only", said RBI Governor Shaktikanta Das.

"The unchanged stance signals that RBI is confident in its projections and expects Inflation to cool down gradually. RBI raises GDP growth projection to 6.5 per cent for FY24 from earlier," said Anil Rego- Founder and Fund Manager at Right Horizons PMS.

The 30-share BSE Sensex rose 226 points or 0.38 per cent to 59,915, while the broader NSE Nifty moved 61 points or 0.35 per cent higher to trade at 17,618. Mid- and small-cap shares were positive as Nifty Midcap 100 climbed 0.44 per cent and small-cap gained 0.63 per cent.

"Stock markets saw a short-term appreciation on the back of this announcement. The long term remains to be seen but the outlook gets optimistic," said Adhil Shetty, CEO, Bankbazaar.com.

12 out of the 15 sector gauges -- compiled by the National Stock Exchange -- were trading in the green. Sub-indexes Nifty Financial Services, Nifty PSU Bank and Nifty Metal were outperforming the NSE platform by rising as much as 1 per cent, 1.39 per cent and 0.51 per cent, respectively.

On the stock-specific front, Cholamandalam Investment and Finance Company was among the top Nifty gainer as the stock surged 7.77 per cent to Rs 842.20. Aarti Drugs and Indian Energy Exchange soared more than 6 per cent, each. Adani Enterprises, Bajaj Finance, IndusInd Bank, SBI and Bajaj Finserv rose up to 3.42 per cent.

The overall market breadth was strong as 2,231 shares were declining while 1,023 were advancing on BSE.

On the 30-share BSE index, Reliance Industries, Bajaj Finance, ICICI Bank, SBI, HDFC twins (HDFC and HDFC Bank), L&T, IndusInd Bank and Sun Pharma were among the top gainers.

In contrast, HCL Tech, Tech Mahindra, Titan, Nestle India and Infosys were trading in the red. Also, Avenue Supermarts, Dabur, Nykaa, Shopper Stop and Westlife Foodworld fell up to 3.40 per cent.

In a separate development, government bond yields fell sharply after the surprise RBI decision to maintain the status quo on rates.

The RBI factors in retail inflation while arriving at its policy decision. In February this year, retail inflation rose 6.44 per cent (year-on-year), easing from 6.52 per cent in January but has remained above the RBI's mandated target range of 2-6 per cent for 10 out of the last 12 readings.

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