By Bharath Rajeswaran
(Reuters) – Indian shares rose on Wednesday, after the central bank kept rates unchanged as expected but eased its policy stance, opening the door for rate cuts.
The Nifty 50 index was up 0.52% at 25,143.95 points as of 10:28 a.m. IST, while the S&P BSE Sensex added 0.5% to 82,042.50.
Both the benchmarks were up 0.2% ahead of the policy decision.
The Reserve Bank of India (RBI) kept the key policy rates unchanged but changed its policy stance from the hawkish ‘withdrawal of accommodation’ to ‘neutral’.
“The RBI’s dovish commentary and change in policy stance is positive for rate-sensitive sectors like banking, real estate and auto,” Vinit Bolinjkar, head of research at Ventura Securities said.
The bank index rose 1%, while financials added 1.25%. Auto and real estate shares rose 0.6% and 2.1%, respectively.
The central bank’s policy stance and commentary “will help the housing market to maintain momentum during the festive season,” Anuj Puri, chairman at Anarock Property Consultants said.
Eleven of the 13 major sectors advanced.
The broader, more domestically-focussed small- and mid-caps rose 1.4% and 1.2%, respectively.
The pharma index added 1.3%, led by a 6% rise in Divi’s Laboratories after Citi initiated coverage of the drugmaker’s stock with a “buy” rating.
The IT index rose 0.7%, extending gains for the fourth session in a row, after labour market data eased concerns of recession in the U.S., a key source of revenue for the sector.
Torrent Power jumped 7.25% after securing two orders from Maharashtra State Electricity Distribution Company.
Tractors maker Escorts Kubota rose 3.5% and was the top gainer on the auto index after Emkay Research upgraded it to “buy” from “add”, citing a likely upcycle in tractors market in the second half of the fiscal year 2025.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Eileen Soreng and Mrigank Dhaniwala)
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