Market opens higher ahead of RBI policy outcome

The 30-share Sensex fell over 15 points to 31,175.23 soon after the policy announcement, but later recovered 86.75 points to 31,277.31.

The Sensex is trading at 31,256.94 points up by 66.38 points or 0.21 per cent.

The RBI left the short-term lending rate or repo rate unchanged at 6.25 per cent and the cash reserve ratio static at 4 per cent. The central bank left lending rates unchanged citing risks to inflation due to spurt in farm loan waivers by states but raised lending capacity of banks to support economic growth.

RBI also revised the projected real GVA growth for this financial year to 7.3 per cent, down 10 basis points from the earlier projection made in April 2017.

The broader markets rebounded, with the mid-cap and small-cap indices climbing 0.69 and 0.40 per cent, respectively. On the NSE, 37 shares closed in the green, while 14 shares ended the day in the red.

Shares of GAIL, Bharti Airtel, ICICI Bank, SBI, Hero Motocorp, M&M, Bajaj Auto and Tata Steel were trading in positive zone with gains of up to 0.93 percent.

Sector-wise, pharma rose 1.37 per cent, PSU Bank 1.24 per cent, metal 0.98 per cent, energy 0.96 per cent, auto 0.77 per cent, FMCG 0.66 per cent, private bank 0.67 per cent, finance service 0.42 per cent and infra 0.41 per cent.

Realty stocks also attracted buying, with Indiabulls Real Estate rising 4.11 per cent, Sobha 0.66 per cent and Godrej Properties 0.23 per cent.

The Sensex of the BSE after opening at 31,252.71 points, touched a high of 31,289.98 points and a low of 31,229.25 points. Shanghai increased 1.23 per cent, Hang Seng declined 0.09 points.

RBI Governor Urjit Patel-led MPC for the fourth straight time kept the repo rate unchanged at 6.25%.

The RBI in its second bi-monthly monetary policy review of 2017-18 chose to reduce the Statutory Liquidity Ratio (SLR) by 50 basis points to 20 per cent.

In overseas markets, most European stocks edged higher in volatile trade ahead of Thursdays UK election and the European Central Banks policy decision.

  • Zachary Reyes