After the RBI Policy was announced, the benchmark indices were up. The Sensex was up 383.25 points or 0.64 percent at 60061.08. The Nifty was up 117.70 points or 0.66 percent at 17908. About 1827 shares have advanced, 929 shares declined, and 109 shares are unchanged.
The Reserve Bank of India (RBI) has decided to keep the benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance even as the economy is showing signs of recovery after the second COVID wave.
This is the eighth time in a row that the Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, has maintained status quo.
Equity benchmark Sensex rallied over 500 points in morning trade on Friday, after the Reserve Bank maintained an accommodative stance and kept key interest rates unchanged in its bi-monthly monetary policy review.
After reclaiming the 60,200 level, the 30-share Sensex was trading 524 points or 0.88 per cent higher at 60,201.83. Similarly, the Nifty rose 149.45 points or 0.84 per cent to 17,939.80.
Tata Steel was the top gainer in the Sensex pack, rising over 2 percent, followed by Infosys, TCS, Reliance Industries, HCL Tech and Bajaj Auto.
On the other hand, HUL, NTPC, Titan and Nestle India were the laggards.
Rate-sensitive banking and auto indices were trading on a positive note, while the realty index was in the red.
At the opening bell, the stock market indices opened higher amid positive global cues and expectations on RBI Policy.
At 09:17 AM, the Sensex was up 260.83 points or 0.44 percent at 59938.66,. The broader Nifty50 was up 85.60 points or 0.48 percent at 17,875.90. About 1,624 shares have advanced, 368 shares declined, and 82 shares are unchanged.
Tata Steel was among major gainers at the opening bell. The stock was up 1.41 percent at Rs 1,307.70 followed by Larsen and Toubro 1.27 percent at Rs 1,733.75, Mahindra and Mahindra 1.20 percent up at Rs 888.70, Bajaj Auto 0.90 percent up at Rs 3,863.50, TCS 0.76 percent up at Rs 3,922.35 and Maruti 0.72 percent at Rs 7,545.55.
Among early losers on the bourses, HCL Tech declined (-)0.60 percent to Rs 1,298.45, Bajaj Finance (-)0.33 percent to Rs 7,722.05, Sun Pharma (-)0.22 percent to Rs 821.15 and HDFC Bank (-)0.11 prcent to Rs 1,609.55.
The six-member Monetary Policy Committee (MPC) of the central bank will make the decision today after a three-day meeting that began today (October 6).
Tata consultancy Services also announce its Q2FY22 results today.
US market close with gains
World equity markets rebounded on October 7 after United States Senate leaders moved to avert a US debt default, while a global easing in energy prices tempered deepening fears of “stagflation.”
The Dow Jones Industrial Average gained 0.98 percent, the S&P 500 rose 0.83 percent and the Nasdaq Composite moved up 1.05 percent.
Asian shares up
Asian shares rose on October 8 as Chinese shares returned from a one week holiday upbeat, tracking a global rally, while investors also eyed key US jobs data for any fresh insight into the timing of Federal Reserve tapering.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, after rallying 2.1 percent the day before, its biggest daily gain since August. Japan's Nikkei index advanced 1.8 percent.
RBI MPC likely to keep repo rate steady at 4%
The RBI monetary policy committee (MPC) is more likely to vote for holding the policy repo rate steady at 4 percent, notwithstanding rising inflationary pressures in the economy and the depreciation of the rupee.
The MPC is likely to remain on a pause mode on Friday as it awaits more cues from the growth-inflation front. The general consensus among economists is that the stance will remain ‘accommodative’.
Deepak Jasani, Head-Retail Research, HDFC Securities said, "The MPC is likely to remain on a pause mode on Friday as it awaits more cues from the growth-inflation front. The general consensus among economists is that the stance will remain ‘accommodative’."
China's services activity returns to growth in September
Activity in China’s services sector returned to growth in September as a major COVID-19 outbreak in the eastern province of Jiangsu receded, a private-sector survey showed on October 8, offering some support to a slowing economy.
The Caixin/Markit services Purchasing Managers’ Index (PMI) rose to 53.4 from 46.7 in August, pulling away from the lowest level seen since the height of the pandemic last year. The 50-point mark separates growth from contraction on a monthly basis.
US unemployment claims decline
The number of Americans applying for unemployment benefits fell last week, another sign that the US job market and economy continue their steady recovery from last year's coronavirus recession.
Unemployment claims fell by 38,000 to 326,000, the first drop in four weeks, the Labor Department said on October 7. Since surpassing 900,000 in early January, the weekly applications, a proxy for layoffs, had fallen more or less steadily all year. Still, they remain elevated from pre-pandemic levels: Before COVID-19 hammered the US economy in March 2020, weekly claims were consistently coming in at around 220,000.
Energy crisis in Europe
Russian President Vladimir Putin’s offer of help to “stabilize” the natural-gas market in Europe—where prices have surged around 500 percent this year—has calmed worries of an energy crisis in the region and helped cool commodity prices.
Dollar inches up
The U.S. Dollar Index Futures that tracks the greenback against a basket of other currencies inched up 0.01 percent to 4.233 by 10:37 PM ET (2:37 AM GMT).
The USD/JPY pair was up 0.25 percent to 111.87. Japanese data released earlier in the day showed that household spending contracted by a higher-than-expected 3% year-on-year and 3.9 percent month-on-month in August. The adjusted current accountwas at JPY1.04 trillion ($9.33 billion) while the current account was at JPY 1.666 trillion.
The AUD/USD pair inched up 0.06 percent to 0.7316 and the NZD/USD pair was up 0.34 percent to 0.6945.The USD/CNY pair inched up 0.08% percent to 6.4502.
China’s Caixin services purchasing managers index for September, released earlier in the day, was 53.4.The GBP/USD pair inched down 0.01 percent to 1.3615.
MF most attractive tool of investments during pandemic: Survey
Mutual funds remain the most attractive tool of investment during COVID-19 followed by equities as returns are healthy in this asset class, according to a survey by Financial advisory firm Findoc Group.
The survey was conducted among more than 10,000 existing customers of Findoc Group between July 27 and September 4.
Fitch cuts India economic growth forecast
Fitch Ratings has cut India's economic growth forecast to 8.7 percent for the current fiscal but raised GDP growth projection for FY23 to 10 percent, saying the second COVID-19 wave delayed rather than derail the economic recovery.
In its APAC Sovereign Credit Overview, Fitch Ratings said India's 'BBB-/Negative' sovereign rating "balances a still-strong medium-term growth outlook and external resilience from solid foreign- reserve buffers, against high public debt, a weak financial sector and some lagging structural factors".
Five stocks under F&O ban
Five stocks – Canara Bank, Indiabulls Housing Finance, NALCO, Punjab National Bank, and SAIL – are under the F&O ban today.