Sensex surges 250 points, Nifty 74 points as RBI MPC hikes repo rate by 50 bps

The Indian equity markets traded in a positive direction after the Reserve Bank of India (RBI) hiked repo rates by 50 basis points (bps) to 5.4%. With this rate-hike cycle, the Indian central bank has raised interest rates by 140 bps so far.

Major indices like Nifty50 rose 74 points to trade at 17,456.15, whereas the S&P BSE Sensex climbed over 250 points to trade at 58,549.01.

Also Read| Surplus liquidity in banking system has come down to Rs 3.8 lakh crore: RBI Governor

The broader indices were trading in green with the BSE Midcap index rising 0.44%, while the Small cap index was up by 0.58%. The top gaining sectoral indices on the BSE were Basic Materials up by 1.07%, Telecom up by 0.94%, Bankex up by 0.92%, TECK up by 0.84% and IT up by 0.71%, while Oil & Gas down by 0.56%, Energy down by 0.33%, Consumer Durables down by 0.12%, Utilities down by 0.11% and Auto down by 0.06% were the top losing indices on BSE.

Also Read| FDI inflows have improved to $13.6 billion in Q1FY23: RBI Governor

The top gainers on the Sensex were Ultratech Cement up by 2.32%, ICICI Bank up by 1.88%, Bharti Airtel up by 1.25%, Wipro up by 1.22% and Axis Bank up by 1.18%. On the flip side, Reliance Industries down by 0.91%, Maruti Suzuki down by 0.68%, Power Grid Corporation down by 0.34% and HDFC down by 0.07% were the top losers.

Also Read| CPI inflation for FY23 projected at 6.7%: RBI governor

The top gainers on Nifty were Ultratech Cement up by 2.59%, Grasim Industries up by 1.85%, ICICI Bank up by 1.73%, Wipro up by 1.25% and Bharti Airtel up by 1.18%. On the flip side, Hindalco down by 1.11%, Reliance Industries down by 0.94%, Hero MotoCorp down by 0.67%, Maruti Suzuki down by 0.64% and Cipla down by 0.53% were the top losers.

Also Read| Real GDP growth projection for FY23 retained at 7.2%: RBI governor

Asian markets are trading mostly in green with Taiwan Weighted strengthened 330.67 points or 2.25% to 15,032.87, Nikkei 225 surged 234.96 points or 0.84% to 28,167.16, KOSPI rose 19.37 points or 0.78% to 2,492.48, Jakarta Composite soared 13.22 points or 0.19% to 7,070.57, Shanghai Composite gained 9.06 points or 0.28% to 3,198.10 and Straits Times advanced 5.62 points or 0.17% to 3,275.48. On the flip side, Hang Seng decreased by 6.25 points or 0.03% to 20,167.79.

Also Read| RBI MPC revises marginal standing facility (MSF) rate to 5.65%

“The 50 bp repo rate hike came 15 bp higher than the majority expectation of a 35bp hike. It is evident that the MPC is frontloading the rate hikes since it feels that CPI inflation is above comfort levels. The MPC has been emboldened to go for this 50 bp hike since the economic activity is resilient and withdrawal of accommodation stance is necessary to anchor inflation expectations,” said Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Also Read| RBI MPC adjusted standing deposit facility (SDF) rate to 5.15%

“The RBI governor went so far as to say that the Indian economy is holding steady in an ocean of turbulence. The capacity utilization in the industry at 75% is higher than the long-term average. This positive view on the economy has been well received by the stock market in spite of the higher at hand expected repo rate hike,” he added.

The BSE Sensex ended 51.73 points or 0.09%t lower at 58,298.80 on Thursday. The Nifty dipped 6.15 points or 0.04% to finish at 17,382.

Also Read| RBI MPC hikes repo rate by 50 bps as inflationary pressures intensify

Foreign institutional investors (FIIs) bought shares worth a net Rs 1474.77 crore, while domestic institutional investors (DIIs) sold shares worth a net Rs 46.79 crore in the Indian equity market on August 4, as per provisional data available on the NSE.  

Also Read| Explained: Difference between RBI’s accommodative, neutral & hawkish stance

Meanwhile, international oil benchmark Brent crude went higher by 0.15% to USD 94.26 per barrel. The rupee extended gains on Friday and was trading at 78.99 per dollar, compared to 79.16 prior to the policy decision.