India's stock markets hit new record highs, rupee too gets stronger
RBI earlier decided to leave rates unchanged and give more time for growth to return
Mumbai: Indian shares hit record highs on Friday after the country's central bank kept interest rates steady in the face of stubbornly high inflation, while also retaining its accommodative monetary policy stance.
The NSE Nifty 50 index was up 0.80 per cent at 13,239.05 as of 10:42 India time, while the S&P BSE Sensex was up 0.80 per cent at 44,993.92. Both indexes hit record highs.
The Indian rupee strengthened to 73.72 against the dollar.
Reserve Bank of India (RBI) Governor Shaktikanta Das said India's prospects have brightened with progress on COVID-19 vaccines, consumer confidence has turned positive and projected real GDP for the current financial year to contract just 7.5%.
Stick with it
All 53 analysts and economists in a Reuters poll conducted in November said they did not expect any change in rates at the three-day policy meeting ending Friday. "RBI has been extremely proactive in terms of providing support to the economy and to the market in whichever way possible," said Avneesh Sukhija, senior financial analyst at BNP Paribas India.
Today's decision marks a continuation from October's decision of entering a revival mode from survival, Sukhija added. Including today's session, the benchmark indexes have hit record highs for 11 of the last 18 sessions, boosted by progress in developing a working coronavirus vaccine. They added more than 11% in November on record inflows from foreign institutional investors.
The RBI has already cut its key interest rate by a total 115 basis points this year to revive growth and cushion the impact of the COVID-19 pandemic. Rate-sensitive financial stocks also rose after the policy announcement. The Nifty Banking index, which surged nearly 24 per cent in November, was up 1.27 per cent.