Sensex breaches the 51,000-mark; Nifty surges past 15,000
Benchmark indices made history on Friday, just before Reserve Bank of India (RBI) Governor Shakitkanta Das announced the decisions of the Monetary Policy Committee (MPC). The Nifty 50 index went past the 15,000-mark and S&P BSE Sensex traded at 51,073.27 in the early hours. However, the equity benchmarks retreated from the highs after Das's press meet. Here are more details.
Sensex returned from historic high
At the time of publishing, the S&P BSE Sensex traded at 50,865.99, up by 251.70 points. Similarly, Nifty 50 was at 14,956.65, an increase of 61 points. The rupee strengthened against the dollar at Rs. 72.94. The immediate effect of RBI's decisions was seen on sensitive stocks in the realty and banking sectors as they traded higher on Friday morning.
Repo and reverse repo rate were kept unchanged
As expected by economists, RBI decided to leave repo rate and reverse repo rate unchanged at 4% and 3.35% respectively. Das said the central bank will continue maintaining its accommodative stance. Neeraj Dhawan, director at Quantum Securities, explained that since RBI chose not to make changes in key rates, the market was not bound to register a historic spike.
'Nothing in announcements to propel markets higher'
"MPC's decision is more or less in line with expectations. There was nothing in the announcement to help propel the markets higher. Banking stocks are helping the indexes to hold on to gains and we are seeing some profit-taking as markets were at high valuations," he added.
RBI expecting 10.5% GDP growth in 2021-22
Among other things, Das also said RBI expects the GDP growth in 2021-22 to be at 10.5%. Capacity utilization in the manufacturing sector increased to 63.3% in Q2 as opposed to 47.3% in Q1, he revealed, adding that foreign direct investment (FDI) also surged in recent times. "Going forward, we see the Indian economy moving in only one direction i.e. upward," Das said.
