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Markets rebound post RBI policy decision, Sensex rises 89 points

Mumbai: Equity benchmarks ended modestly higher on Friday after the Reserve Bank raised the key interest rate on expected lines to cool stubbornly high inflation and defend the rupee.

The 30-share BSE Sensex ended 89.13 points or 0.15 per cent higher at 58,387.93 after facing volatility during the fag-end of trade. During the day, it climbed 350.39 points or 0.60 per cent to 58,649.19.

Similarly, the broader NSE Nifty went up by 15.50 points or 0.09 per cent to finish at 17,397.50.

The Reserve Bank on Friday raised the key interest rate by 50 basis points to 5.40 per cent — the third straight increase since May.

With the latest hike, the repo rate or the short-term lending rate at which banks borrow has crossed the pre-pandemic level of 5.15 per cent.

Reserve Bank of India (RBI) Governor Shaktikanta Das also signalled that the hike was not the end of the rate tightening regime and more may come to tame inflation that has stayed above its upper tolerance limit of 6 per cent for six

months.

The central bank, however, did not revise its existing economic growth or inflation forecast despite indications of a global slowdown, recessionary conditions in the developed economies, and the moderation already witnessed in commodity prices.

UltraTech Cement was the top gainer among the Sensex constituents, climbing 2.86 per cent, followed by ICICI Bank, Bharti Airtel, PowerGrid, Infosys, Wipro and Axis Bank.

On the other hand, Mahindra & Mahindra was the biggest laggard with a decline of 2.04 per cent after its Q1 results came below expectations.

Maruti Suzuki, Reliance Industries, IndusInd Bank, Bajaj Finserv, SBI and Tata Steel were among the other prominent losers.

On a weekly basis, the Sensex advanced 817.68 points or 1.42 per cent, while the Nifty gained 239.25 points or 1.39 per cent.

In the broader market, the BSE smallcap gauge gained 0.23 per cent while the midcap index inched up 0.09 per cent in Friday's session.

Among the BSE sectoral indices, telecom jumped 1.34 per cent, followed by basic materials (0.89 per cent), teck (0.82 per cent) and IT (0.72 per cent).

Utilities, auto, power and consumer durables lost up to 1.86 per cent.

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