Indian stocks surge ahead of RBI's monetary policy outcome
New Delhi, April 5: Indian stocks surged on Wednesday ahead of the outcome of the Reserve Bank of India's (RBI) monetary policy meeting, with the benchmark Nifty 50 index hitting a life-high.
The Nifty 50, the flagship index of the National Stock Exchange (NSE), surged 1.13 per cent or 146.75 points to 13,113.95 in mid-day trade, surpassing its previous record close of 13,055.75 on October 5. The latest Monetary Policy Committee (MPC) of the RBI in early February, it decided to raise the repo rate by 25 basis points to 6.5 per cent to manage inflation. So far, RBI has raised the repo rate, the rate at which it lends to banks, by 250 basis points cumulatively since May 2022.
The markets were driven by positive sentiment ahead of the RBI's policy decision, which is widely expected to keep interest rates unchanged. The RBI is scheduled to announce its bi-monthly monetary policy at 11:45 a.m. IST.
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Investors were also buoyed by expectations of more stimulus measures from the government to boost economic growth. The government has already announced a slew of stimulus measures, including tax cuts and increased spending, to revive the economy.
In addition, the markets were supported by buying in banking, metal, auto and IT stocks. Banking stocks were in the limelight as investors bet on further rate cuts. Shares of HDFC Bank, Axis Bank and ICICI Bank were among the top gainers.
Markets reacted positively to the news that the government has allowed foreign direct investment (FDI) in the coal sector, with Coal India and NALCO surging over 5 per cent.
Overall, the broader Nifty 500 index rose 1.09 per cent to 15,156.95. Market breadth was positive as 1,541 shares advanced and 853 shares declined.
The Indian rupee also gained against the US dollar, trading at 73.50. Overall, the markets are cautiously optimistic ahead of the RBI's policy decision, as investors hope for more stimulus measures to revive the economy.
"Traders should hedge their positions ahead of the RBI policy announcement on Thursday, which will be closely watched to see if the central bank indicates a pause or continues to raise rates in order to keep inflation under control," said Deven Mehata, Equity Research Analyst, Choice Broking.
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- ANI
