Financials, IT power Sensex, Nifty to record closing high ahead of RBI rate decision

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Indian shares bounced back from a bout of profit-booking and settled at record closing highs on Thursday, lifted by high-weightage financials and information technology stocks, ahead of the central bank’s policy decision on Friday.

The blue-chip NSE Nifty 50 was up 0.36 per cent to 22,514.65, while the S&P BSE Sensex added 0.47 per cent to 74,227.63.

Both the benchmarks rose about 0.7 per cent each, hitting fresh record highs at the open, before surrendering gains, as profit booking emerged.

However, they recovered to close at record high levels, supported by high-weightage financials, which rose 0.83 per cent.

“The surge to record highs highlights positive trends in the Indian stock market,” said Sonam Srivastava, founder and fund manager at Wright Research Portfolio Management Services.

HDFC Bank, India’s top private lender and the heaviest stock in Nifty 50 index, added 3.06 per cent as its deposits grew sequentially in the March quarter. The stock was the top Nifty 50 gainer.

“Optimistic outlook for the upcoming earnings season from strong business updates is also contributing to positive sentiment,” Srivastava added.

Also read: Rupee rises 9 paise to close at 83.44 against US dollar

Financials, as well as other rate-sensitives like realty and consumer stocks will remain in focus, with the Reserve Bank of India (RBI) expected to hold rates steady at its monetary policy decision on Friday, according to a Reuters poll of economists.

While the rate pause is a given, RBI’s commentary on the inflation outlook will be crucial, especially for consumer stocks, said analysts.

The second-highest weighted information technology sub-index gained 1.08 per cent on the day.

IT stocks have added about 2 per cent in two days on the back of several stock upgrades by CLSA and JP Morgan.

Among stocks, upstream oil companies like Oil & Natural Gas Corporation and Oil India dropped 2.1-2.5 per cent, after the government hiked the windfall tax on petroleum crude for the fifth time since February.

ONGC was the top Nifty 50 loser and dragged the oil & gas index 1.37 per cent lower.