Markets close at new highs, post best weekly gains since April

Extending its winning run for the fifth session, the Sensex finished at a fresh lifetime peak on Friday after the Reserve Bank of India kept interest rates unchanged but continued its accommodative stance and announced fresh liquidity measures to revive growth. State Bank of India jumped 10.69% while bond yields surged after the RBI’s policy decision. The markets notched their best weekly gain since April.

The Nifty sailed past the 15,000-mark intraday for the first time ever and closed up 28.6 points (0.19%) to 14,924.25 while the Sensex rose by 117.34 points (0.23%) to close at 50,731.63. The Nifty Bank also hit record high.

While the Nifty Bank settled lower than its intraday high, the index closed the session at a new record, up by 0.88% to settle at 35,654.5. The biggest gainers on the Nifty Bank were SBI, KMB, HDFC Bank, and Bank of Baroda with gains of 11.24%, 4.17%, 1.15% and 0.91%, respectively.

Besides a positive monetary policy speech, the markets also cheered SBI’s quarterly results. In his speech, RBI governor Shaktikanta Das said the RBI’s stance will continue to remain accommodative. The central bank also said it would ensure that there was enough liquidity for the government’s borrowing programme.

Gaurav Dua, senior vice president, head of capital market strategy, Sharekhan by BNP Paribas, said, “This is good news for banks and financials along with positive rub off to domestic cyclical sectors. We remain constructive on equity markets and believe that the economy and corporate earnings are at a cusp of a new multi-year upcycle.”

Apart from the accommodative stance, the monetary policy said funds from banks via the TLTRO scheme will also be available to NBFCs. Additionally, banks have been exempted from keeping cash reserve ratio requirements against loans disbursed to new MSME borrowers. This was also given a thumbs-up by the markets.

The Nifty Midcap saw profit taking and ended lower by 1%.

Foreign portfolio investors pumped in capital worth $194.8 million in equities on Friday.

The biggest gainers on the Nifty were SBI, Tata Steel, Divi’s Laboratories, KMB, and Dr Reddy’s Laboratories, up by 11.24%, 4.9%, 4.73%, 4.17% and 2.83%, respectively. The major losers were Axis Bank, Bharti Airtel, Tata Motors, Coal India and UPL, down by 2.86%, 2.73%, 2.36%, 1.95% and 1.85%, respectively.