The Reserve Bank of Indian (RBI) lowered the cash reserve ratio (CRR) by 100 basis points (in four tranches) and the repo rate by 50 basis points to 5.50 percent on Friday, which caused the local benchmark indices to soar. The Nifty increased 252.15 points, or 1.02%, to settle at 25,003.05. The Sensex gained 746.95 points, or 0.92 percent, at 82,188.99.
Banking stocks led the increase. Nifty Bank gained 817.55 points, or 1.47 percent, to settle at 56,578.40. The Bank Nifty reached 56,695 during the day, the highest level of the primary banking index to date.
Largecaps saw an increase, but so did midcaps and smallcaps. At 18,582.45, the Nifty Smallcap 100 index was up 149.85 points, or 0.81 percent, while the Nifty Midcap 100 index was up 707.30 points, or 1.21 percent, at 59,010.30. According to Rupak De of LKP Securities, the stock index has experienced a significant increase after the RBI’s bazooka policy change.
After many sessions, it finished over the 25,000 barrier, suggesting a spike in market members’ optimism. We anticipate that the Nifty will also break out above the current consolidation range this time, as a rise followed by consolidation usually leads to an upward breakout,” De said.
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