Sensex salutes RBI policy

The Indian markets resumed its upturn on Thursday after taking a breather in the previous trading session, with index heavyweights surging in the wake of the RBI's move to refrain from hiking key policy rates.

Markets started off on a flat note and stayed in a tight range till the RBI's policy announcement. The key indices actually slipped into the negative zone after the central bank maintained status quo on policy rates besides leaving the CRR static.



But after hitting the day's low, the indices took a sudden "U" turn and never looked back as IT, Banking, Metals and Real Estate stocks accelerated. The broader indices under-performed the main indices today.

"Sentiment received a boost after the RBI cut SLR for banks to 24% from 25% and said it would inject Rs480bn into the system via bond buyback over a month earlier. The BSE Banking stocks gained as investors viewed the RBI move as a positive one for the sector. IT stocks rallied for the second day in a row amid hope of strong Q3 quarterly results", says Amar Ambani, Head of Research (India Private Clients) - IIFL.

The BSE Sensex advanced 217 points to close at 19,865 and the NSE Nifty gained 56 points to close at 5,949.