NEW DELHI: The Nifty50 snapped a three-day losing streak and ended higher after RBI’s monetary policy committee kept the key rates unchanged. The central bank also retained its accommodative stance but made a slight shift on the liquidity front.
Analysts noted that the monetary policy committee indicated a bit of hawkishness in its decision on gradual, calibrated withdrawal of liquidity over a multi-year time frame in a non-disruptive way.
The calculative approach of the Shaktikanta Das-led team was welcomed by the market. Sensex rallied over 400 points, led by Reliance Industries and ITC.
FMCG and metal stocks were among the biggest sectoral gainers. Adani Group stocks also rallied as they received $2 billion in funding. IT stocks, which will start announcing their quarterly numbers from next week, ended lower.
“Market was cautious during the last 2-3 days ahead of the RBI meeting and its future policy stance. Measures being in-line with market expectations led to a relief rally. The focus has shifted to the Q4 earnings season, which will start next week, initiated by the IT and banking sector,” said Vinod Nair, Head of Research at Geojit Financial Services.
“Outlook for the banking sector is robust due to rapid bounce in credit growth and improvement in balance sheet while preview for IT is mixed as Q4 is seasonally weak.”
Overall, the market has remained sideways after briefly crossing the 18,000 crore mark earlier during the week.
Equity markets have shown strong resilience even though it faces headwinds from an uncertain global environment and persistent inflation. Also, India VIX has further cooled down by 7 per cent to below 18, indicating stability in the market.
“Momentum was seen in several broader market themes like defence, power, realty and tyre sector stocks. Q4FY22 earning season will kick-off from next week and would be the key factor for market direction going forward,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal.
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