Stock market today: The Indian stock market experienced healthy buying across segments in intraday trade on Wednesday, October 1, following the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) ‘s decision to keep the repo rate and policy stance unchanged for the second consecutive meeting. After cutting rates by 50 basis points in June, the central bank left the benchmark interest rate unchanged in the August and September policy meetings.
RBI Governor Sanjay Malhotra-led Monetary Policy Committee (MPC) kept the repo rate unchanged at 5.5 per cent, and maintained the policy stance as ‘neutral’.
The Sensex jumped over 500 points, or 0.60 per cent, to hit an intraday high of 80,810, while the Nifty 50 also rose over half a per cent to hit an intraday high of 24,746. The BSE Midcap and Smallcap indices also rose by over half a per cent each during the session.
Why is the Indian stock market rising today?
The primary reason behind the rally in the Indian stock market is the surge in banking stocks. HDFC Bank, ICICI Bank, and Kotak Mahindra Bank were among the top contributors to the gains in the Sensex and the Nifty 50. The Nifty Bank index jumped by over a per cent after the RBI’s status quo on interest rates.
Banking stocks surged as the RBI’s decision to hold rates would mean no further pressure on the margins of banking players.
“Banking stocks are driving the benchmarks as the RBI’s status quo has ensured there will not no further pressure on their margins,” said Pankaj Pandey, the head of research at ICICI Securities.
Ajit Mishra, the SVP of research at Religare Broking, has similar views.
“Banking stocks have been under pressure in the recent past due to margin pressure. As the RBI has signalled favourable growth-inflation dynamics while maintaining rates, banking stocks are rising, driving the benchmarks higher,” said Mishra.
(This is a developing story. Please check back for fresh updates.)
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