RBI rate cut sends Sensex above 30,000 – briefly
04 March 2015
The BSE Sensex and the National Stock Exchange's Nifty touched record highs today as interest rate-sensitive stocks such as HDFC Bank gained after the Reserve Bank of India eased monetary policy for a second time this year, raising hopes of credit growth. However, the new highs proved short-lived.
The benchmark BSE Sensex rose as much as 1.46 per cent to mark its all-time high of 30,024.74, crossing the psychological 30,000 barrier for the first time. Its previous record high was 29,844.16 reached on 30 January. The Nifty also touched lifetime highs of 9,119.20 points in early trade.
But by the end of trading today, the Sensex had snapped its four-day rally despite the RBI rate cut to fall by 213 point to close at 29380.13 – which is still an all-time high.
The markets have been volatile ever since finance minister Arun Jaitley announced his union budget on Saturday (See: For the first time in 4 years, markets rise on Budget day). Today witnessed an end-trade slump, though the figures remain at highest-ever levels.
The Sensex fell 1 per cent after earlier rising 1.46 per cent to mark the record high during the day.
Traders say some foreign investors may be booking profits after the recent rally. Foreign investors have bought Indian equities worth $4.48 billion.
The falls in India markets also track lower Asian shares as investors grow cautious before the upcoming central bank meetings and US jobs data
The benchmark indices touched new highs on Wednesday after the Reserve Bank of India (RBI) surprised markets with a 25 basis points rate cut.
The RBI in a statement said, ''Disinflation is evolving along the path set out by the Reserve Bank in January, 2014 and, in fact, at a faster pace than earlier envisaged.''