Indian equity indices rose as the Reserve Bank of India (RBI) hiked the repo rate by 50 basis points to 5.90% on Friday in an effort to control inflation, which has stayed over its tolerance limit for the previous eight months. This is the fourth consecutive rate rise, following a 40 basis point increase in May and a 50 basis point increase in each June and August.

The Nifty gained over 100 points to trade beyond 16,900, while the S&P BSE Sensex gained over 400 points to reach the day’s high of 56,818.

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In broader markets, the Nifty SmallCap 100 and Nifty MidCap 100 indexes increased 0.3% and 0.1%, respectively. Meanwhile, the India VIX volatility index fell by more than 3%.

Rate-sensitive sectors such as Nifty PSU Bank and Nifty Bank gained the most – more than 1%. Furthermore, the Nifty Realty and Nifty Auto indexes rose by 0.2% to 0.8%. Around 1696 shares were up at 11 AM, 1238 shares were down, and 122 shares were unchanged. 

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“The dominant theme in economic and market discussions these days is India’s resilience and outperformance in a weakening global economy and bearish equity markets. The RBI governor’s comments today are a reaffirmation of this ‘India resilient’ theme. It was this positive commentary on India’s growth impulses and projection of 7% GDP growth with 6.7% inflation for FY 23 that has come as a positive even while the policy announcements relating to rates were on totally expected lines. The Governor’s confident statement that CAD can be financed comfortably even with crude at $100 for the rest of the year is reassuring. In brief, the positive commentary is market positive,” said Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. 

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The Sensex is presently trading at 56,877.34, up 467.38 points or 0.83% after fluctuating in a range of 56,957.42 and 56,147.23. On the index, there were 17 stocks that advanced and 13 stocks that declined.

The broader indexes were trading in a mixed bag, with the BSE Midcap index falling 0.10% and the Small-cap index rising 0.16%. Bankex increased by 1.10%, Telecom increased by 0.97%, PSU increased by 0.76%, Power increased by 0.61%, and Utilities increased by 0.58%, whereas IT decreased by 0.95%, TECK decreased by 0.74%, Healthcare decreased by 0.23%, FMCG decreased by 0.13%, and Auto decreased by 0.06%.

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Power Grid Corporation gained 3.14%, Ultratech Cement gained 2.06%, Reliance Industries gained 1.65%, Kotak Mahindra Bank gained 1.61%, and HDFC Bank gained 1.40% on the Sensex. Asian Paints was down 1.72%, Tech Mahindra was down 1.67%, Dr Reddy’s Lab was down 1.42%, TCS was down 1.39%, and HCL Technologies was down 1.05%.

The Nifty is presently trading at 16,955.70, up 137.60 points or 0.82% from a low of 16,747.70 and a high of 16,969.95. On the index, 30 equities advanced and 20 stocks declined.

ONGC gained 3.55%, Power Grid Corporation gained 3.27%, Hindalco gained 2.44%, Ultratech Cement gained 2.00%, and Kotak Mahindra Bank gained 1.71% on the Nifty. Asian Paints was down 1.79%, Coal India was down 1.52%, Dr Reddy’s Lab was down 1.51%, Tata Motors was down 1.43%, and TCS was down 1.34%.

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All Asian markets are trading lower with Nikkei 225 falling 586.60 points or 2.22% to 25,835.45, Hang Seng tumbling 11.39 points or 0.07% to 17,154.48, Taiwan Weighted sank 130.49 points or 0.96% to 13,403.77, KOSPI fell 3.07 points or 0.14% to 2,167.86, Straits Times trembled 13.20 points or 0.42% to 3,101.88, Shanghai Composite declined 6.35 points or 0.21% to 3,034.85 and Jakarta Composite lost 34.95 points or 0.5% to 7,001.25.