Millennium Post

Inflation reined in, Rajan starts growth fight

Stock markets cheered the RBI’s surprise move to cut repo rate with the benchmark Sensex Thursday surging 728.73 points in its biggest single-day gain since May 2009 to end at 28,075.55 on the back of all-round buying.

The NSE Nifty soared 216.60 points to close at 8,494.15. Investor wealth reclaimed the Rs 100-lakh crore mark led by gains in shares of realty, banking, capital goods, power, auto and oil & gas. Over 1,700 stocks listed on the BSE rose. Besides, a strengthening rupee which was trading over one per cent higher at 61.35 against the dollar (intra-day) also buoyed the trading sentiments.

Prominent gainers among the 30 Sensex stocks include HDFC, SBI, ICICI Bank, L&T, Tata Power, RIL, M&M, Maruti Suzuki, ITC Ltd, Axis Bank, HDFC Bank and Tata Motors. Among Sensex components, 28 stocks gained, while Hindalco and Hindustan Unilever declined. Thursday’s Sensex gain of 728.73 point is the biggest daily rise since May 4, 2009 when it had jumped by 731.50 points.

The Reserve Bank of India Thursday surprised markets with a 25 basis points cut in repo rates to 7.75 per cent with a view to boost economic growth. “This rate cut...can be taken by the markets as a signal to a rate lowering cycle. This also signals a certain confidence that the RBI is showing in longer term trends on fiscal front and a leading signal of a victory over the inflation dragon,” said Tushar Pradhan, Chief Investment Officer, HSBC Global Asset Management India.

Buying activity gathered momentum as funds and investors were seen creating positions on hopes of further market friendly measures and hopes of encouraging quarterly earnings by blue-chip companies, brokers said.  A firming trend at other Asian bourses following rebound in
commodity prices including oil and copper after Wednesday’s plunge and a higher opening in European markets were other factors behind Thursday’s rally, they said. Finance Minister Arun Jaitley said, “This move represents one more step towards reviving investments.”
Next Story
Share it