Following the announcement by Reserve Bank of India (RBI) on policy rates, Sensex, the benchmark index of Bombay Stock Exchange, has jumped by 570 today closing at 33589. Nifty 50, the benchmark index of National Stock Exchange, jumped up by 200 points closing at 10329. The monetary policy committee of RBI kept the repo rate unchanged today at six percent, and has changed its stance to neutral.
Markets have recovered in the wake of couple of positive triggers. First, in a circular issued to banks on Wednesday, RBI has temporarily relaxed provisioning norms for banks that could help them improving their financial results for the last financial year. Provisions for companies referred to National Company Law Tribunal have been reduced to 40 percent at the end of March for secured loans. Earlier, the provisioning limit was 50 per cent.
The latest macro-economic data has also given a much-needed upward push to the market indicating stable manufacturing conditions in the country. According to statistics, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) continued to stay above the mark of 50, after it fell to a low of 51 in March from the level of 52.1 in February.
Karthikraj Lakshmanan, Senior Fund Manager-Equities, BNP Paribas Mutual Fund, said, “ The output of eight core infrastructure sector, constituting 40.27% of the weight of items included in the Index of Industrial Production, increased 5.3% in February 2018 over February 2017.”
Last month the stock markets dived below 10,000 mark, for the first time since October 12, 2017, as US President Donald Trump imposed tariffs on Chinese goods fearing a start of the global trade war.
In the morning Nifty 50 opened 131.30 points up at 10,259.70 and the Sensex opened 400 points up at 33,420.