Bourses snaps seven-day winning streak, Sensex zooms over 1,016 pts post RBI rate hike

Mumbai: Equity indices made an emphatic comeback on Friday after falling for seven straight sessions after the RBI hiked interest rates by 50 basis points on expected lines and projected inflation coming under control from January next year.

Overcoming a wobbly start, the 30-share BSE Sensex soared 1,016.96 points or 1.80 per cent to settle at 57,426.92. During the day, it rallied 1,312.67 points or 2.32 per cent to 57,722.63.

Similarly, the broader NSE Nifty climbed 276.25 points or 1.64 per cent to end at 17,094.35.

Bharti Airtel topped the Sensex gainers' list with a jump of 4.49 per cent, followed by IndusInd Bank, Bajaj Finance, Kotak Mahindra Bank, Titan, HDFC Bank, Bajaj Finserv and Tata Steel.

However, Asian Paints, Dr Reddy's, ITC, Tech Mahindra and Hindustan Unilever were the laggards, dropping up to 1.26 per cent.

The Reserve Bank of India (RBI) on Friday raised benchmark lending rate by 50 basis points — the fourth straight increase since May — as it extended its battle to tame stubbornly high inflation.

The Monetary Policy Committee (MPC) raised the key lending rate or the repo rate to 5.90 per cent - the highest since April 2019.

Since the first unscheduled mid-meeting hike in May, the cumulative increase in interest rate now stands at 190 basis points and mirrors similar aggressive monetary tightening in major economies around the globe to contain runaway inflation by dampening demand.

The RBI retained its inflation projection for FY23 at 6.7 per cent amid geopolitical concerns triggered by Russia-Ukraine war, and expects inflation to be under control from January. The central bank is mandated to keep retail inflation in a band of 2-6 per cent.

The rupee extended its initial gains and settled 33 paise higher at 81.40 against US dollar on Friday.