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Sensex, Nifty trade in green terrain after RBI keeps policy rate unchanged

Indian equity benchmarks were trading in green in late morning session, with both Sensex and Nifty holding notable gains. Positive cues from other Asian markets helped key indices to remain higher. Domestic sentiments remained positive, after Reserve Bank of India (RBI) decided to leave benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance, implying rate cuts in the future if need arises to support the economy hit by the COVID-19 pandemic. The benchmark repurchase (repo) rate has been left unchanged at 4 per cent, Governor Shaktikanta Das said while announcing the decisions taken by the central bank's Monetary Policy Committee (MPC).

On the global front, Asian markets were trading higher, after South Korea had a current account surplus of $11.51 billion in December, the Bank of Korea said on Friday - up from $8.97 billion in November. For all of 2020, the current account surplus was $75.28 billion. Looking at the financial account, net assets increased by $8.50 billion during December. The increase for the year 2020 as whole was $77.12 billion. Direct investment assets increased by 4.97 billion dollars, and direct investment liabilities increased by $2.50 billion.

The BSE Sensex is currently trading at 50936.90, up by 322.61 points or 0.64% after trading in a range of 50565.29 and 51073.27. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.45%, while Small cap index was up by 0.06%.

The top gaining sectoral indices on the BSE were PSU up by 3.17%, Bankex up by 2.46%, Realty up by 1.66%, Consumer Durables up by 0.93% and FMCG up by 0.58%, while Telecom down by 2.30%, TECK down by 1.47%, Auto down by 1.36%, IT down by 0.95% and Consumer discretionary down by 0.61% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 12.62%, Kotak Mahindra Bank up by 4.32%, ITC up by 2.33%, NTPC up by 2.27% and Dr. Reddy’s Lab up by 1.57%. On the flip side, Bharti Airtel down by 2.97%, Mahindra & Mahindra down by 1.74%, Maruti Suzuki down by 1.42%, TCS down by 1.21% and Infosys down by 1.12% were the top losers.

Meanwhile, Economic Affairs Secretary Tarun Bajaj has said that the government is sticking to the target of becoming a $5 trillion economy by 2024-25 and emphasis on infrastructure sector and other initiatives taken in Budget 2021-22 are aimed at achieving the goal. The spending on infrastructure has gone up from Rs 4.12 lakh crore to Rs 5.54 lakh crore while on the health sector it has risen to Rs 2.23 lakh crore from Rs 94,000 crore in the Budget Estimate for 2020-21.

On the GDP growth, the Secretary in the Department of Economic Affairs (DEA) said real GDP growth would be 10-10.5 per cent in the next fiscal. He said ‘Our revenue figure is under-stated not overstated. We have taken nominal GDP at 14.4 per cent and revenue growth at 16.7 per cent. So the buoyancy is only 1.16 per cent. We are hopeful we will get more than this. We will definitely be within 6.8 per cent and could be lower also’.

He added that allaying apprehensions on impact of large borrowing on private investment, Bajaj said there is ample liquidity in the market. As a result, the cost of borrowing for the government also declined this year. There are other alternatives before the government, including the National Social Security Fund (NSSF). He also said ‘if private sector needs to come up, we will be happy to create space for them’.

The CNX Nifty is currently trading at 14972.80, up by 77.15 points or 0.52% after trading in a range of 14864.75 and 15014.65. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were SBI up by 12.64%, Kotak Mahindra Bank up by 4.38%, NTPC up by 2.42%, ITC up by 2.30% and Tata Steel up by 1.56%. On the flip side, Bharti Airtel down by 3.05%, Tata Motors down by 2.19%, Wipro down by 1.49%, UPL down by 1.46% and Eicher Motors down by 1.40% were the top losers.

Asian markets were trading higher; Hang Seng increased 152.45 points or 0.52% to 29,265.95, Nikkei 225 surged 341.86 points or 1.21% to 28,683.81, Taiwan Weighted strengthened 119.58 points or 0.76% to 15,825.80, KOSPI rose 6.46 points or 0.21% to 3,094.01, Shanghai Composite gained 16.23 points or 0.46% to 3,518.09, Straits Times advanced 1.04 points or 0.04% to 2,906.62 and Jakarta Composite soared 19.62 points or 0.32% to 6,126.84.

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