Sensex Gains After RBI’s Widely Expected Decision to Hold Rates
Wall Street’s Fresh Peak Lifts India Stocks Before Rate Decision
(Bloomberg) -- Indian stocks rose after the central bank’s widely expected decision to keep interest rates unchanged.
The S&P BSE Sensex Index climbed 0.4% to 41,306.03 as of 3:30 p.m. in Mumbai, after briefly erasing an intraday gain before the rate decision. The NSE Nifty 50 Index advanced by the same magnitude.
The Reserve Bank of India left interest rates unchanged for a second straight meeting, as surging inflation kept policy makers from easing again to support economic growth. The central bank raised its inflation projection for the six months to September to 5%-5.4% from 3.8%-4% seen previously.
Sentiment also got a boost from a global rally in risk assets on speculation that the fallout from the coronavirus will be contained and after China announced tariff cuts on some $75 billion of imports from the U.S.
Strategist Views
“The central bank’s policy has come on expected lines and it has kept some room to cut rates in the future, which will give some boost to the market,” said Chokkalingam G, the head of Equinomics Research & Advisory Pvt. in Mumbai. “The cumulative cut in the borrowing cost has been pretty big in the last one year and it is good that the central bank is keeping some powder dry.”
The Numbers
- Fourteen of the 19 sector sub-indexes compiled by BSE Ltd. advanced, led by a gauge of telecom stocks.
- IndusInd Bank Ltd. gained the most on the Sensex, while Infosys Ltd. dropped.
Related Stories
- With Rate Hold a Given, Twist Aim in Focus for Indian Bonds
- India Stocks Have Yet to Price in Slowing Economy, Manulife Says
- Modi’s Lack of Fiscal Aid Gives RBI ‘Leeway’ on Rates (Podcast)
--With assistance from Ishika Mookerjee.
To contact the reporter on this story: Abhishek Vishnoi in Singapore at avishnoi4@bloomberg.net
To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, James Cone
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