Business Today

Sensex ends above 27,000-mark, Nifty at 8,266 after RBI policy; SBI stock top gainer

The market rallied after the RBI kept key policy rates unchanged but said it would remain "accommodative" as it keeps watch on inflation after it climbed unexpectedly in April.

BT Online   New Delhi     Last Updated: June 8, 2016  | 09:18 IST
Photo: Reuters

The S&P BSE Sensex on Tuesday settled the day 232 points higher, while the broader Nifty50 ended above its key support level of 8,250 after Reserve Bank of India (RBI) kept the policy rates unchanged in its bi-monthly monetary policy review.

The headline indices also took cues from Asian shares which hit a five-week high after Federal Reserve Chair Janet Yellen said US interest rate hikes are likely on the way, though she held back any reference to the timing.

The 30-share index ended the day at 27,009, up 232.22 points, while broad-based 50-share index quoted 8,266, up 65.40 points at close.

The RBI kept its policy interest rate unchanged at a five-year low of 6.50 per cent, while cautiously signalling it could cut rates later this year if monsoon rains, and other factors, dampen upward pressure on food prices.


Analysts said the RBI would likely be open to at least one more 25 basis point rate cut this year after easing the repo rate by 150 bps since January 2015. "Going by the track record of the RBI, they would perhaps wait for the clarity on monsoons," said Ravi Gopalakrishnan, head of equities at Canara Robeco Mutual Fund.

"Post-monsoon, we expect 25 basis points cut and by the end of the year another 25 basis points."

Apart from needing a good monsoon, Rajan's statement said inflation risks could also be offset by astute management of stocks by the government, and by companies increasing supply capacity.

Consumer price inflation rose at a faster-than-expected pace, to 5.39 per cent in April, from 4.83 per cent in March.

Banking stocks hogged the limelight with S&P BSE Sensex being the top sectoral gainer (1.63 per cent). Federal Bank stock (5.49 per cent) contributed the most to the index followed by SBI (5.40 per cent).

Dhanlaxmi Bank rose as much as 12.4 per cent, its highest since January 11, after The Economic Times reported the lender may become a takeover target, citing two unidentified bankers familiar with the developments.

A lowdown on markets today

12:54 pm

Sensex at 27,063, up 286.27 points

Nifty at 8,289, up 88.65 points

11:37 am

Sensex at 26,898, up 121.27 points

Nifty at 8,241, up 40.80 points

09:20 am

Sensex at 26,873, up 96.43 points

Nifty at 8,231, up 30.50 points

(With inputs from Reuters)


  • Print

A    A   A