Sensex, Nifty recover and win marginally ahead of RBI policy results

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Stock Market India: Equity benchmarks rebounded and gained marginally for RBI

Indian equity benchmarks led the way on Friday, recovering from marginal losses in the previous session, but remain jittery for the Reserve Bank of India’s policy results.

The 30-stock Sensex Index gained more than 250 points to 58,549.58 and the broader NSE Nifty rose about 0.3 percent to 17,441.35, compared to a lower closing in the previous session.

That was ahead of an expected rate hike by the country’s central bank, which aims to curb persistently high inflation in Asia’s third-largest economy.

The RBI has hiked rates twice since May, raising 40 basis points during an unscheduled meeting, followed by 50 basis points in June.

Economists polled by Reuters expected the central bank to raise interest rates Friday, but these were broadly split between 25 basis points and 50 basis points.

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The Indian rupee strengthened ahead of the monetary policy decision, supported by overnight weakness in oil prices and the dollar.

“While falling international commodity prices offer some respite, we believe elevated inflation rates will continue to warrant some caution in (RBI) policy outlook,” Rahul Bajoria, India’s chief economist at Barclays, told Reuters.

The central bank will continue to calibrate policies to maintain and promote macroeconomic stability while curbing inflation, RBI Governor Shaktikanta Das said last month, adding that there could be some delay in the coming months. could be due to rising prices.

The three-day meeting of the monetary policy committee of the six-member panel began on Wednesday, and it is almost inevitable that it will raise interest rates to curb rising domestic inflation. Repo rates will rise to 5.15 percent, their pre-breakout level, if the RBI raises them by at least 25 basis points.

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The three-day monetary policy committee meeting of the six-member panel began on Wednesday, and it is almost inevitable that it will raise interest rates to curb rising domestic inflation. Repo rates will rise to 5.15 percent, their pre-coronavirus level, if the RBI raises them by at least 25 basis points.

In line with the global trend of monetary policy tightening to cool inflation, the RBI has so far increased the key repo rates — the rate at which a country’s central bank lends money to commercial banks — by 90 basis points to 4. 90. per cent.

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It will be the third consecutive increase if the RBI decides to raise the policy repo rate on Friday. The rate at which a country’s central bank lends money to its commercial banks is known as the repo rate.

“Today’s RBI rate action is unlikely to impact markets. The most likely scenario of a 30-35 basis point rate hike is already known and discounted by the market. The market will be looking forward to the RBI’s comments on inflation, GDP growth for FY23 and other macros like CAD,” VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, told ANI.

Also, momentum in the domestic market is now being influenced by global signals and strong purchases by foreign investors, Mr Vijayakumar added.

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