Nifty Reclaims 17,500, Sensex Rises Over 300 Points Ahead Of RBI Policy Decision

The Indian equity benchmarks edged higher on Thursday ahead of Reserve Bank of India's monetary policy decision on hopes that the central bank will keep the rates on hold at record lows while maintaining its accommodative stance, analysts said. The Sensex rose as much as 344 points to hit an intraday high of 58,810 and Nifty 50 index reclaimed its important psychological level of 17,500 led by gains in Infosys, HDFC Bank, Power Grid, HDFC and Tata Steel.

As of 9:21 am, the Sensex was up 113 points at 58,579 and Nifty 50 index advanced 90 points to 17,554.

“On technical grounds, Nifty has an immediate resistance at 17,550. If Nifty closes above that, further upside can be expected towards 17,640-17,730 mark. On the flip side 17,400-17,330 will act as strong support levels,” brokerage firm Nirmal Bang said in a note.

All eyes will be on RBI Governor Shaktikanta Das' monetary policy speech that will begin at 10:00 am. The RBI Governor's speech assumes significance in the backdrop of rising interest rates globally and Union Budget which was presented on Feb. 1.

The Reserve Bank of India is likely to keep interest rates at record lows on the back of relatively low inflation amid a global surge, according a poll by news agency Reuters. Respondents in a Feb. 2-4 Reuters poll were closely split on the timing of the next rise, with slightly more than half, 17 of 32, expecting 25 basis point rise to 4.25 per cent in April.

Rate sensitive banking, financial services, auto and realty indices were trading on a flat note ahead of the policy decision. While, select metal, media and IT shares were witnessing buying interest.

On the other hand, consumer durables, oil & gas, healthcare and pharma shares were facing selling pressure.

Mid- and small-cap shares were facing selling pressure as Nifty Midcap 100 index fell 0.25 per cent and Nifty Smallcap 100 index declined 0.29 per cent.

Among the individual shares, FSN E-Commerce Ventures, parent of fashion retailer Nykaa, dropped as much as 6 per cent to Rs 1,744 after its net profit declined over 50 per cent to Rs 29 crore in December quarter from Rs 69 crore in the same quarter last year.

ONGC was top Nifty gainer, the stock rose 2.35 per cent to Rs 168. Power Grid, JSW Steel, Tata Steel, Tata Motors, Infosys, HDFC, NTPC, HDFC Bank and Axis Bank also rose between 0.5-2 per cent.

On the flipside, Coal India, SBI Life, HDFC Life, Maruti Suzuki, Asian Paints, Bajaj Finserv,  Mahindra & Mahindra and Hindustan Unilever were among the losers.