Volatile trading session on RBI's big day, Sensex holds steady with 152-point gain

Mumbai : The Reserve Bank of India (RBI) has opted to keep its key policy rates unchanged for the fourth consecutive time, maintaining the repo rate at 5.25 per cent, leading to a volatile but ultimately positive close for the BSE Sensex, which gained 152 points.

The Reserve Bank of India's Monetary Policy Committee unanimously kept the policy repo rate unchanged at 5.25 per cent for the fourth consecutive meeting.

The BSE Sensex closed 152.05 points higher at 78,581, recovering from an intraday low, while the NSE Nifty edged up 9.75 points to 24,624.65.

The RBI marginally upgraded India's economic growth forecast for the current financial year to 6.7 per cent, citing a resilient domestic economy.

Indian equity markets experienced volatility, partly due to the introduction of a new Closing Auction Session (CAS) mechanism for F&O stocks.

Global factors like the Middle East conflict and rising Brent crude prices (up 1.75 per cent to USD 80.75 per barrel) contributed to market caution.
 
Benchmark BSE Sensex closed higher by 152 points in a volatile session on Wednesday after the Reserve Bank of India kept its key policy rates unchanged for the fourth consecutive time.

The 30-share BSE Sensex rose by 152.05 points, or 0.19 per cent, to end at 78,581 with 17 of its constituents closing with gains, 12 with losses and one unchanged.

The index opened higher and hit a day's high of 79,055.38 in the first half of the session. However, the index slipped into the red in the late afternoon session, hitting a low of 78,285.74 by losing 769.64 points.

Gains in bluechip banking, auto and capital goods shares in the pre-close session helped the barometer recover from losses.

Market Performance and RBI's Stance : The 50-share NSE Nifty edged up 9.75 points, or 0.04 per cent, to end at 24,624.65.

It hit a high of 24,677.60 and a low of 24,497.95 during intraday trade.

The indices have been facing wide divergence since Monday after stock exchanges introduced a new auction mechanism for shares having futures and options (F&O) contracts.

The Closing Auction Session (CAS) in the equity cash segment became operational on Monday, introducing a new auction-based mechanism for determining the closing prices of eligible stocks in a move aimed at making the price discovery process more transparent and robust.

Meanwhile, the Reserve Bank of India kept its benchmark policy rate unchanged for a fourth consecutive meeting on Wednesday, opting to wait for greater clarity on whether higher energy costs triggered by the Iran war feed into broader inflationary pressures.

The six-member Monetary Policy Committee, headed by Governor Sanjay Malhotra, unanimously voted to keep the policy repo rate unchanged at 5.25 per cent and retained its "neutral" policy stance.

Economic Outlook and Expert Views : Marginally raising its economic growth forecast for the current financial year to 6.7 per cent from 6.6 per cent projected in June, the central bank said domestic growth remained resilient, supported by robust domestic demand, manufacturing and services activity and strong exports, despite heightened global uncertainty stemming from the West Asia conflict and trade tensions.

"The RBI's MPC has maintained the status quo while marginally upgrading FY27 GDP growth projection, citing a resilient domestic economy. Additionally, annual inflation estimates were lowered, indicating the governor's open minded approach, which suggested an optimistic view though further policy action would depend on data," Vinod Nair, Head of Research, Geojit Investments Limited, said.

From the Sensex pack, UltraTech Cement, NTPC, State Bank of India, Mahindra & Mahindra, InterGlobe Aviation and Kotak Mahindra Bank were among the major winners.

Tata Consultancy Services, HCL Tech, Reliance Industries and Bharat Electronics were among the laggards.

Brent crude, the global oil benchmark, climbed 1.75 per cent to USD 80.75 per barrel.

"Indian equity markets ended largely unchanged as investors turned cautious amid lingering uncertainty over a lasting resolution to the Middle East conflict and booked profits following the recent rally. The Nifty opened above its pre-Closing Auction Session (CAS) close but failed to build on early gains, with selling pressure emerging through the session and leaving the market with a cautious undertone despite supportive global cues," Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.

Foreign Institutional Investors (FIIs) bought equities worth Rs 2,446.47 crore on Tuesday, according to exchange data.

In Asian markets, South Korea's KOSPI jumped 3.76 per cent and Japan's Nikkei 225 index climbed 3.66 per cent.

Shanghai's SSE Composite index and Hong Kong's Hang Seng index also ended higher.

Markets in Europe were trading in positive territory.

US markets ended sharply higher on Tuesday.

In the previous session, the Sensex declined 210.08 points, or 0.27 per cent, to settle at 78,428.95.

The Nifty dropped 159.40 points, or 0.64 per cent, to end at 24,614.90.