Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
Indian equity benchmarks extended gains to a second straight day to post a record high, after the RBI held the key interest rates at existing levels and maintained its "accommodative" stance. Gains in IT, oil & gas and PSU banking shares led the market higher. Most analysts said the market drew comfort from no big surprises as the RBI's policy was along expected lines.
The Nifty50 benchmark climbed 104.9 points to settle at a record 17,895.2, surpassing an existing closing high registered on September 27. The 30-scrip Sensex gauge rose 381.2 points or 0.6 percent to settle at at 60,059.1.
During the session, both indices came within reach of their all-time highs registered late last month.
Among blue-chip stocks, Reliance Industries, Wipro, Infosys, tata Motors and Tech Mahindra -- closing between 1.6 percent and 3.8 percent higher -- were the top gainers. On the other hand, Coal India, SBI Life, NTPC, Maruti and Shree Cement -- down between 1.1 percent and 1.6 percent -- were the worst hit among the 27 laggards in the Nifty50 universe.
"The credit policy is neutral to positive as the market was already expecting that interest will remain unchanged. It is is cheering the fact that there is no change in stance... We are outperforming despite a rise in US bond yields, the dollar index and crude oil prices," said Santosh Meena, Head of Research, Swastika Investmart.
RIL shares scaled a record high and were the biggest boost for both headline indices.
TCS shares ended 1.3 percent higher at Rs 3,943 apiece on NSE as investors awaited the IT major to kick off the earnings season. The country's largest IT company will post its financial results for the July-September period after market hours.
Broader markets also rose with the smallcap index beating headline indices by rising 1.2 percent. The midcap index rose 0.4 percent. Dixon, IndiaMart, MRF, Chambal Fertilizers and IEX -- rising between 5.5 percent and 15.7 percent -- were among the top gainers from the midcap and smallcap segments. On the flipside, Godrej Properties, MFSL, Adani Total, GNFC and Infibeam -- falling between 2.5 percent and 4.6 percent -- were among the top losers.
The Monetary Policy Committee kept interest rates steady at record lows as widely expected, and reiterated the need to unwind COVID-era stimulus gradually to aid the nascent economic recovery. Currently, the repo rate -- the key interest rate at which the RBI lenders funds to commercial banks -- is at four percent and the reverse repo rate -- the rate at which it borrows -- at 3.35 percent.
The central bank retained its GDP growth forecast for the year ending March 2022 at 9.5 percent, while lowering its consumer inflation projection to 5.3 per cent 5.7 per cent citing evenly-balanced risks.
The RBI policy seemed more dovish than expected but in line with forecasts, said Nikhil Gupta, Chief Economist at Motilal Oswal Financial Services. "Weak growth should keep the RBI go more easy on normalisation, even if some emerging markets have already hiked rates," he said.