The S&P BSE Sensex gave up some of its gains to trade 0.59% higher at 44,895.26 by 12:26 pm, while the NSE Nifty 50 index was up 0.57% at 13,208.45. The rupee strengthened to 73.75 against the dollar.
The strong market performance was aided by RBI’s policy review announcement. (Photo: Reuters)
India’s benchmark stock index crossed 45,000 points for the first time on Friday, as the country’s central bank upgraded its GDP target for the current fiscal year and kept interest rates steady in the face of stubbornly high inflation.
Reserve Bank of India Governor Shaktikanta Das said India’s prospects have brightened with progress on Covid-19 vaccines and projected real GDP for the current financial year to shrink just 7.5% from an earlier expectation of a 9.5% contraction.
The S&P BSE Sensex gave up some of its gains to trade 0.59% higher at 44,895.26 by 0656 GMT, while the NSE Nifty 50 index was up 0.57% at 13,208.45. The rupee strengthened to 73.75 against the dollar.
The RBI kept the key lending rate unchanged at 4%. All 53 analysts and economists in a Reuters poll conducted in November had said they did not expect any change in rates.
The central bank has already cut its key interest rate by a total of 115 basis points this year to revive growth and cushion the impact of the pandemic.
Governor Das also announced measures to improve access to funding for stressed sectors and said the RBI would take further steps when necessary to ensure ample rupee liquidity to sustain visible growth impulses.
The RBI’s stance marks a continuation from October’s decision of entering a revival mode from survival, said Avneesh Sukhija, a senior financial analyst at BNP Paribas India.
Including the current session, the benchmark indexes have hit record highs for 11 of the last 18 sessions. They added more than 11% in November on record inflows from foreign institutional investors.
Rate-sensitive financial stocks also rose after the policy announcement. The Nifty Banking index, which surged nearly 24% in November, was up 0.88%.
UltraTech Cement Ltd jumped as much as 6.2% to a record high, a day after the cement manufacturer said it would invest 54.77 billion rupees to expand capacity.