Sensex jumps over 700 points, Nifty reclaims 25,000-level as investors cheer RBI's jumbo rate cut
Mumbai, Jun 6 (PTI): Benchmark indices Sensex and Nifty surged nearly 1 per cent on Friday, driven by a rally in rate-sensitive sectors following the Reserve Bank's jumbo rate cut of 50 basis points.
Market analysts said in light of benign inflation forecasts, RBI has taken steps to boost growth. A 50 bps repo rate cut supported by phased 100 basis points CRR cut will boost growth and lower the borrowing costs.
The policy is broadly positive for growth and investment in a challenging global macro environment, they said.
After a muted start, benchmark sensitive index Sensex and Nifty soon recovered all the early lost ground fuelled by the RBI monetary policy decision and gained over 1 per cent.
The 30-share BSE Sensex ended the day higher by 746.95 points, or 0.92 per cent, to settle at 82,188.99. During the day, it surged 857.85 points, or 1.05 per cent, to 82,299.89.
The 50-share NSE Nifty reclaimed the 25,000-level and climbed 252.15 points, or 1.02 per cent, to settle at 25,003.05.
All key sectors contributed to the rally, with rate-sensitive segments such as realty, financials, and auto emerging as top gainers, closely followed by others.
Among sectoral indices, realty jumped 4.74 per cent, financial services (1.79 per cent), metal (1.56 per cent), auto (1.50 per cent), consumer discretionary (1.38 per cent), consumer durables (1.30 per cent) and bankex (1.25 per cent).
Industrials and capital goods were the only laggards.
Interest-rate-sensitive realty index jumped 4.74 per cent, while auto index went up 1.50 per cent and bankex climbed 1.25 per cent.
"The tone was initially cautious ahead of the outcome of the MPC’s monetary policy review, but sentiment turned sharply positive following the surprise announcement of a 50-basis points repo rate cut and a staggered 100 basis points reduction in the CRR. This triggered a strong upward move, followed by a range-bound phase for the remainder of the session," Ajit Mishra – SVP, Research, Religare Broking said.
Mishra further noted that "going forward, the impact of the rate cut is expected to continue influencing market sentiment. The rate-sensitive pack, along with select themes like railways, are likely to stay in focus, while other sectors may contribute on a rotational basis."
From the Sensex firms, Bajaj Finance surged 4.93 per cent and Axis Bank climbed 3.15 per cent.
Maruti, IndusInd Bank, Bajaj Finserv, Eternal, Mahindra & Mahindra, Tata Steel, Kotak Mahindra Bank, Titan, HDFC Bank, and NTPC were among the other major gainers.
Bharti Airtel and Sun Pharma were the laggards.
The BSE midcap gauge jumped 0.91 per cent and smallcap index climbed 0.43 per cent.
As many as 2,278 stocks advanced while 1,744 declined and 134 remained unchanged on the BSE.
According to Dhiraj Relli, MD & CEO, HDFC Securities, several external headwinds -- ranging from US tariff policies and global trade tensions to sluggish worldwide growth and geopolitical risks -- have weighed on domestic economic prospects, reinforcing the rationale for monetary easing.
"With enhanced liquidity and reduced borrowing costs, conditions are now set for sustained economic momentum and a market recovery. Rate-sensitive sectors responded enthusiastically to the announcement, reflecting renewed investor confidence. This stimulus could propel Indian equity markets beyond their current trading range, potentially pushing the Nifty past 25,000 and toward previous highs of 26,200," Relli said.
On the weekly front, the BSE benchmark surged 737.98 points or 0.90 per cent and Nifty jumped 252.35 points or 1 per cent.
Global oil benchmark Brent crude dipped 0.46 per cent to USD 65.04 a barrel.
In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index and Shanghai's SSE Composite index settled in the positive territory while Hong Kong's Hang Seng ended lower.
European markets were on a mixed note, while the US markets ended lower on Thursday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 208.47 crore on Thursday, according to exchange data.
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Pak, Afghan forces trade fire along Chaman border: Report
Islamabad (PTI): A heavy exchange of fire between Pakistani and Afghan forces was reported from the key Chaman border, according to a media report on Saturday.
Injuries were reported from the district hospital, but no fatalities occurred, the Dawn newspaper reported.
Officials from both sides accused each other of instigating the flare-up late on Friday night across the border in the Balochistan province.
While Pakistani officials said that Afghan forces had fired mortar shells on the Badani area, Afghan Taliban spokesperson Zabihullah Mujahid claimed it was Pakistan that launched an attack on Spin Boldak, alleging that their forces were responding.
Pakistan's official sources told Dawn that Pakistani forces retaliated against the Afghan aggression and returned fire.
There were also reports of fighting on the Chaman-Kandahar highway, but these could not be immediately verified.
A senior official in Quetta confirmed on condition of anonymity that the exchange of fire started around 10 pm and continued until late at night.
The medical superintendent of Chaman district hospital said that three injured, including a woman, were brought to the medical facility.
There was neither any official word from the Inter-Services Public Relations -- Pakistan Army's media wing -- nor from the Foreign Office.
The Chaman border crossing, also known as Friendship Gate, connects Balochistan province to Afghanistan’s Kandahar.
Relations between Pakistan and Afghanistan have deteriorated amidst regular allegations by Pakistan regarding the failure of the Afghan regime to deny safe havens to Tehreek-e-Taliban Pakistan terrorists.
The two countries had agreed on a ceasefire following tensions last month, but the Foreign Office said last month that technically there was no truce as it was contingent on the Afghan Taliban stopping terrorist attacks in Pakistan, which they had failed to do.
