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RBI Holds Rates Steady, Boosting Investor Confidence
6 Feb
Summary
- RBI kept repo rate unchanged at 5.25%, maintaining a neutral stance.
- Indian economy shows strong growth trajectory, projected at 7.4% this year.
- Major indices, including Nifty, closed higher after initial choppy trade.
On February 6, Indian equity benchmarks recovered from earlier losses during choppy trading, regaining investor confidence after the central bank's policy announcement. The Reserve Bank of India's Monetary Policy Committee decided to keep the repo rate unchanged at 5.25% and maintained a neutral monetary policy stance.
The Nifty 50 index closed higher, surpassing the 25,650 level, driven by robust performance in FMCG, consumer durables, and private banking sectors. The S&P BSE Sensex also saw gains, closing above 83,580 points.
RBI Governor Sanjay Malhotra noted that the Indian economy continues on a steady growth trajectory, with real GDP expected to register 7.4% growth this year despite global headwinds. Inflation outlook for the first two quarters of the next year was revised slightly upwards to 4% and 4.2%, respectively.
In global markets, US Dow Jones futures signaled a positive opening, while European shares advanced. Asian markets, however, ended lower. In specific stock movements, ITC, Bajaj Finance, and Bharti Airtel provided support to the Nifty. Conversely, broader market indices like the BSE 150 MidCap and BSE 250 SmallCap saw declines.
