Equity market benchmark Sensex jumped more than 350 points while the Nifty50 topped the 16,900 level after the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) lifted rates on expected lines of 50 bps.
The RBI raised repo rates by 50 bps to 5.9%. With this, the repo rate has increased 190 bps in the last five months, from 4% In April to 5.90% currently. RBI Governor Shaktikanta Das said RBI will remain focused on the withdrawal of accommodation stance.
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Standing Deposit Facility (SDF) adjusted to 6.15% while Marginal Standing Facility (MSF) and bank rate also adjusted to 6.15% from 5.65%.
While the rate hike was on expected lines, the central bank lowered the FY23 real GDP growth forecast for FY23 to 7% from 7.2% earlier even though it said that the Indian economy is resilient despite global turmoil.
Reserve Bank of India left the inflation projection for FY23 unchanged at 6.7% on upside risks to food prices.
Sensex traded 375 points, or 0.66%, higher at 56,784.73 while the Nifty was at 16,927.30, up 109 points, or 0.65% around 10:40 am.
Rate-sensitive sectors such as Nifty Bank and Nifty Financial Services traded over a percent higher while the auto and realty indices were up about half a percent.
