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Published on 17/04/2020 10:09:04 AM | Source: IANS

Sensex, Nifty pare gains, investors assess RBI interest-rate cut

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BENGALURU  -Indian stocks trimmed gains on Friday as investors digested a cut in key interest rate by the country's central bank aimed at easing financial stress stemming from the world's biggest nationwide lockdown.

The Reserve Bank of India cut its reverse repo rate by 25 basis points (bps) in a bid to push banks to deploy excess funds toward lending, just two weeks after it cut the rates by 90 bps.

Both the Nifty index and the Sensex, which were up over 3%, pared gains as RBI Governor Shaktikanta Das announced the measures.

The Nifty was last up 1.66% at 9,136.50 by 0620 GMT, while the Sensex was up 1.7% at 31,094.15.

"Markets are still digesting the announcement, they have retained some of the gains," said Anand James, chief market strategist at Geojit Financial Services in Kochi.

"Perhaps, prior to the measures there was some cautionary profit-booking, positive global cues are also helping markets hold gains."

MSCI's broadest index of Asia-Pacific shares outside Japan rose 2.6% and E-Mini futures for the S&P 500 index climbed 3.38% on Friday after the United States joined a handful of other governments to issue guidelines to re-start their economies.

Meanwhile, the rupee was stronger by 0.48% at 76.4475 against the dollar edging away from record lows it saw in the previous session.

As of Friday, India had reported over 11,200 cases of COVID-19 infection and over 400 deaths. Earlier this week, Prime Minister Narendra Modi extended a countrywide lockdown in a move to limit the spread of the coronavirus.

Analysts said Indian markets are pricing in the possibility of relaxation of the nationwide lockdown post April 20.

In domestic trade, both the Nifty banking index and the financials index which jumped over 5% in early trade was trading over 3% higher.

Shares of IT services firm Tata Consultancy Services surged nearly 8% and was the top gainer on the Nifty 50 index.

Pharma stocks were among the losers, the Nifty Pharma index was down over 1% in morning trade.

 

(Reporting by Chandini Monnappa in Bengaluru; Editing by Arun Koyyur)