Stock Market Rally: Sensex Surges 600 Points as RBI Holds Repo Rate
The Indian stock market experienced a significant rally today after the Reserve Bank of India (RBI) Governor, Shaktikanta Das, announced the Monetary Policy Committee’s (MPC) decision to keep the key interest rates unchanged for the 10th consecutive time on Wednesday. Following the announcement, the S&P BSE Sensex surged by 591.46 points, reaching 82,225.81, while the Nifty50 rose by 197 points, closing at 25,210.15.
The RBI has shifted its stance to a ‘neutral’ position. Out of the 6-member MPC, 5 voted in favor of maintaining the policy repo rate at 6.5%. Shaktikanta Das stated, “After assessing the macroeconomic conditions and future outlook, the MPC decided, with 5 out of 6 members in agreement, to keep the policy rate at 6.5%.”
Key Insights
Anu Aggarwal, Head of Corporate Banking at Kotak Mahindra Bank, highlighted that the RBI’s move to a neutral stance marks a pivotal shift. It allows the RBI greater flexibility to navigate evolving economic conditions.
She added, “With food inflation easing and favorable monsoon conditions, this change signals a positive outlook for India’s inflation trajectory. Global trends like the US Federal Reserve’s rate cuts and easing monetary policies further bolster this transition. By adopting a neutral stance, the RBI positions itself to respond proactively to future developments while maintaining economic stability.”
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