Market ignores RBI rate status quo; Nifty soars 39 points
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Optimism over monetary easing amid Government's initiatives on policy reforms outweighed the RBI decision to keep key interest rates unchanged as the benchmark Nifty index zoomed by 39 points at the National Stock Exchange (NSE) today.
Trading began on a strong note, ahead of RBI's policy meet, with action confined to rate sensitive counters and heavyweights. Though market was widely expecting a cut in cash reserve ratio to tide over the liquidity crunch, the apex bank did not tinker with CRR which remains at 4.25 per cent.
The market reacted with disappointment to RBI's status quo on rates in its mid-quarter monetary policy review.
The 50-share index plunged to hit day's low in mid- afternoon before recouping all losses to rally above the psychological 5,900 level with strong buying in bank, metal, FMCG, infra, auto, pharma and technology counters.
The market is now expecting repo rate easing in the next few quarters and the Central bank provided sufficient hints that the focus of the monetary policy will now shift to growth, traders said.
The Nifty swung widely between a high of 5,905.80 and a low of 5,823.15 before ending at 5,896.80, a rise of 38.90 points, or 0.66 per cent, over the last close.
BHEL, Bharti Airtel, Tata Steel, Hindalco, DLF, JP Associates, Sun Pharma, Jindal Steel, Lupin and UltraTech were the top Nifty gainers. The notable laggards were Maruti, ONGC, Ranbaxy, Dr Reddy's, Bajaj Auto, Reliance, Axis Bank and ACC.
The turnover in cash segment rose to Rs 13,975.83 crore from Rs 11,071.42 crore yesterday. Overall, 8,563.46 lakh shares changed hands in 67,70,106 trades. Total market capitalisation stood at Rs 66,74,829 crore.