Market Benchmark index Sensex on Friday breached the 45,000-mark for the first time as the Reserve Bank of India upgraded India's GDP forecast for Financial Year 2021.
Sensex touched 45,023 at around 11 am on Friday while the broader Nifty 50 touched 13, 248 during the intraday trade on Friday.
Sensex jumped over 200 points in early trade on Friday tracking gains in index majors HDFC Bank, L&T and ICICI Bank ahead of the Reserve Bank of India's monetary policy outcome.
The 30-share BSE index was trading 202.71 points or 0.45 per cent higher at 44,835.36.
Similarly, the broader NSE Nifty was trading 66.10 points or 0.50 per cent up at 13,200.
The central bank, which had previously expected the economy to shrink 9.5 per cent in the year to March, revised its forecast after a shallower-than-expected decline in the gross domestic product (GDP) in the July-September quarter.
Das said high frequency indicators point to a recovery gaining traction, with double digit growth in passenger vehicles and motorcycle sales, railway freight traffic, and electricity consumption in October.
The GDP, he said, will grow by 0.1 per cent in the October-December quarter and by 0.7 per cent in the following three months. Overall, the 2020-21 fiscal will end with a (-) 7.5 per cent degrowth.
The economy had contracted by a record 23.9 per cent in the April-June quarter and by 7.5 per cent in the following three months.
The two successive quarters of contraction pushed the economy into a technical recession. This is the first recession since quarterly records started in 1996.
RBI had previously forecast a 5.6 per cent contraction in the quarter through December, followed by a return to growth in the three months to March.
The Reserve Bank of India (RBI) on Friday left interest rates unchanged for a third straight meeting as inflation stayed stubbornly high, and said the economy was recuperating fast and would return to positive growth in the current quarter itself.
The benchmark repurchase rate will be maintained at 4 per cent, RBI Governor Shaktikanta Das said.
The six-member Monetary Policy Committee (MPC) retained its accommodative stance, signaling its intentions to cut interest rates whenever the situation eases.
A spike in consumer prices forced RBI to pause after cutting rates by 115 basis points this year.