Key Indian equity indices surge after RBI’s policy meet

Mumbai, June 7 (IANS) The accommodating monetary policy stance of the Reserve Bank of India despite a status quo on lending rates lifted the investors' mood and boosted key equity market indices on Tuesday.

The 30-scrip Sensitive Index (Sensex) of the BSE touched 26,902.61 points as soon as the policy was announced and after that it maintained a constant upward movement.

The Sensex was trading 257.99 points or 0.96 per cent higher during the afternoon session.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) was also trading 75.60 points or 0.92 per cent higher at 8,276.65 points.

The RBI on Tuesday left its key policy rates and reserve ratios unchanged, concerned over the slight rise in inflation and some domestic and global upside risks that have sprung up since April.

The decision was taken at the second bi-monthly policy review for the current fiscal by RBI Governor Raghuram Rajan at its headquarters here.

Reacting to the policy update, Marie Diron, Senior Vice President for the Sovereign Risk Group at Moody's Investors Service, said no significant changes in the monetary policy stance was expected in the near futher.

"Rather, the transmission of monetary policy will influence India's economic developments and credit profile," Diron said, adding that factors that will contribute towards these are clean-up of bank balance sheets, implementation of the bankruptcy law and inflation control.

The Sensex of the BSE, which opened at 26,833.54 points, was trading at 27,035.44 points (at 02.25 p.m.) in the afternoon session, higher 257.99 points or 0.96 per cent from the previous day's close at 26,777.45 points.

The Sensex touched a high of 27,082.63 points and a low of 26,829.53 points in the trade so far.

Out of the 30 scrips in the Sensex, 27 were trading in green and three were in red -- Infosys, Axis Bank and HDFC.

Almost all the sectors were trading in green. Good buying was observed in banking, realty, fast moving consumer goods (FMCG) and capital goods sectors.

The S&P BSE banking index moved up by 1.78 per cent, realty index gained by 1.64 per cent, FMCG index went up by 1.55 per cent and capital goods index got augmented by 1.46 per cent.