Sensex skyrockets 1,400 points; rate-sensitive stocks surge up to 8% post RBI policy decision

Post the monetary policy action, benchmark equity indexes rose over 1.8%. At 11:50 am, the Sensex was trading 1,400 points or 1.86% higher at 76,473, while NSE Nifty50 was up 385 points or 1.69% at 23,206.

The market capitalisation of all listed companies on BSE surged by Rs 5.54 lakh crore to Rs 421.43 lakh crore.

IT and stops were in spotlight today as the tech pack was the top gainer with Wirpo rising over 5%, Infosys 3%, Tech Mahindra, TCS, and HCL Tech rising between 2-3% each. Other top gainers from the Sensex pack were Bajaj Finance, Ultratech Cement, and Tata Steel. Reliance was the top contributor to today's rally, giving a 192 point leg up to Sensex.

The rate-setting panel decided to maintain the at 6.5%, continuing the stance of 'withdrawal of accommodation' due to ongoing concerns regarding food inflation and global uncertainties. Meanwhile, the (MPC) projected the real for FY25 to be 7.2%, up from 7%

"As anticipated, the Reserve Bank of India (RBI) maintained its key policy rates and liquidity stance unchanged during the June 2024 monetary policy review. Several indications from the governor's speech suggest that the RBI is unlikely to commence rate cuts soon. The upward revision in growth, the expectation of a non-linear disinflationary process, and a clear signal that the RBI will not mirror the Federal Reserve's anticipated monetary policy easing, imply that a rate cut in 2024 is improbable," said , Chief Economist & Executive Director, .

"Today's policy is neutral for in the near term, but the medium-term implications are positive for both the equity and debt markets," Hajra said.

Following the decision, shares of indices surged by up to 8%. and surged by 8%, while Brigade, Lodha, and Mahindra Lifespace rose by 2-5%.

Meanwhile, stocks also saw a surge of up to 3%. Bandhan Bank, Federal Bank, AU Small Finance Bank, Axis Bank, ICICI Bank, and Bank of Baroda rose by 1-3%. Shares of Bajaj Finance, SBI Card, Bajaj Finserv, and IDFC also experienced gains of 1%-3.5%.

Similarly, Nifty Auto stocks increased by up to 2.5%. Apollo Tyre, Balkrishna Industries, Ashok Leyland, Tata Motors, and M&M saw gains of 1-2.5%.

Meanwhile, the RBI left its inflation forecast for this fiscal year unchanged at 4.5%.

"Inflation growth balance is moving favorably. Growth is holding firm. Inflation continues to moderate mainly driven by the core component which reached its lowest level in the current series in April 2024. The deflation in fuel prices is ongoing, food inflation, however, remains elevated," stated RBI Governor Shaktikanta Das.

Furthermore, the RBI has maintained the Standing Deposit Facility (SDF) rate at 6.25%, and the Marginal Standing Facility (MSF) rate and bank rate at 6.75%.

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