Sensex Ends At Fresh Peaks Post RBI Policy, Gold Plummets For 5th Consecutive Day

Mumbai: Extending its winning run for the fifth session, equity benchmark Sensex finished at a fresh lifetime peak on Friday after the Reserve Bank kept interest rates unchanged but continued its accommodative stance and announced fresh liquidity measures to revive growth.

The 30-share BSE benchmark briefly crossed the 51,000-level, before ending 117.34 points or 0.23 per cent higher at its fresh closing record of 50,731.63.

Similarly, the 50-share NSE Nifty scaled the 15,000 mark during the day but shed some ground to close at its all-time high of 14,924.25, up 28.60 points or 0.19 per cent.

SBI was the top gainer in the Sensex pack, rallying 10.69 per cent, followed by Kotak Bank, Dr Reddy's, UltraTech Cement, ITC and HDFC Bank.

On the other hand, Axis Bank, Bharti Airtel, ICICI Bank, Maruti and HCL Tech were among the laggards, tumbling up to 3.30 per cent.

Earlier in the day, the Reserve Bank of India (RBI) kept interest rates on hold while assuring to maintain support for reflating the economy by ensuring ample liquidity to manage the government's near-record borrowing.

The six-member Monetary Policy Committee (MPC) voted to continue with the accommodative stance as long as necessary to revive growth and mitigate the impact of COVID-19 on the economy while ensuring that inflation remains within the target, Governor Shaktikanta Das said.

To absorb higher government borrowings, the central bank provided retail investors a direct option to invest in government securities.

It also sapped some fund from banks by raising the Cash Reserve Ratio (CRR) and use the money for more targeted market operations.

The developmental measures announced by the RBI included the inclusion of NBFCs in the on tap TLTRO scheme, the incentive to banks to lend to new MSME borrowers through a lower CRR requirement and the further deferment of capital conservation buffer.

"RBI has maintained status quo on policy rates on expected lines. However, the commentary is quite dovish. RBI stated its monetary stance would continue to be accommodative. Also, it would ensure enough liquidity is available to support the high government borrowing program.

"Hence, the two cylinder of policy, fiscal and monetary, would be supportive to growth in economy. This is good news for banks and financials along with positive rub off to domestic cyclical sectors. We remain constructive on equity markets and believe that the economy and corporate earnings are at a cusp of a new multi-year upcycle," said Gaurav Dua, SVP, Head Capital Market strategy, Sharekhan by BNP Paribas.

BSE realty, bankex, healthcare, metal, FMCG and finance indices moved up to 0.94 per cent, while telecom, teck, auto, oil and gas and IT ended in the red.

However, broader BSE midcap and smallcap indices underperformed benchmarks, ending up to 0.93 per cent lower.

During the week, the Sensex rallied 4,445.86 points or 9.60 per cent, while the Nifty soared 1,289.65 points or 9.45 per cent.

Global shares maintained their upward trajectory on US stimulus hopes and growth optimism.

Elsewhere in Asia, indices in Hong Kong, Seoul and Tokyo ended with gains, while Shanghai was in the red.

Stock exchanges in Europe were also trading on a positive note in mid-session deals.

Meanwhile, the global oil benchmark Brent crude was trading 0.95 per cent higher at USD 59.56 per barrel.

Rupee Rises 3 Paise To 72.93 Post RBI Rate Decision

Meanwhile, Indian rupee gained 3 paise to settle at 72.93 against the US dollar on Friday after the Reserve Bank kept the policy rate unchanged but maintained its accommodative stance to spur growth.

At the interbank forex market, the local unit opened at 72.98 against the greenback and witnessed an intra-day high of 72.80 and a low of 72.99.

It finally ended at 72.93 against the American currency, registering a rise of 3 paise from its previous close.

On Thursday, the rupee had settled at 72.96 against the American currency.

"Indian Rupee gained strength amid surge in domestic markets and as Reserve Bank of India kept repo rate unchanged at 4.0 per cent and maintained its accommodative stance. However, sharp upside was prevented on strong dollar and surge in crude oil prices," said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

The six-member Monetary Policy Committee (MPC) voted to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of COVID-19 on the economy while ensuring that inflation remains within the target, Governor Shaktikanta Das said.

With green shoots of recovery clearly visible, the RBI pegged GDP growth in the fiscal year beginning April 1, 2021 at 10.5 per cent, a tad lower than 11 per cent predicted by the government's Economic Survey last week.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.13 per cent to 91.41.

On the domestic equity market front, the BSE Sensex ended 117.34 points or 0.23 per cent higher at 50,731.63, while the broader NSE Nifty climbed 28.60 points or 0.19 per cent to 14,924.25.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,936.74 crore on Thursday, according to exchange data.

Brent crude futures, the global oil benchmark, rose 1.24 per cent to USD 59.57 per barrel.

On a weekly basis, the rupee gained 3 paise against the American currency.

"The Indian Rupee ended with small gain on Friday but was little changed against the US currency this week, as persistent dollar bids by the Reserve Bank of India, offset the impact of foreign equity inflows," said Sriram Iyer, Senior Research Analyst at Reliance Securities.

Meanwhile, Asian currencies were broadly weaker this week tracking gains in the US dollar index.

"The Dollar Index was weak this Friday ahead of the payroll number tonight but was headed for its best weekly gain in three months lifted by growing confidence that the US economic recovery will outpace its global peers," Iyer noted.

According to Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services, "after the Budget, it was obvious that RBI wouldn't spoil the party. The MPC stance was more on the lines with our expectations of keeping the repo rate unchanged with accommodative stance."

The positive take away for currency market was the growth projection, rupee surged after the real GDP growth was projected at 10.5 per cent for FY22, he said.

"The USD-INR spot's outlook depends on risk sentiments, which will continue to pick up as nations are lifting travel restrictions. With hopes of liquidity unswerving global economic stimulus we expect the downward trend to continue in USD-INR spot," he noted.

Gold Declines For Fifth Consecutive Day Tanks Rs 163

Falling for the fifth consecutive day, gold prices on Friday declined Rs 163 to Rs 46,738 per 10 gram in the national capital amid rupee appreciation, according to HDFC Securities.

In the previous trade, the precious metal had closed at Rs 46,901 per 10 gram.

Silver, however, gained Rs 530 to Rs 67,483 per kg, from Rs 66,953 per kg in the previous trade.

In the international market, gold was quoting with gains at USD 1,810 per ounce and silver was flat at USD 26.71 per ounce.

(Story Compilation From PTI Inputs)