The S&P BSE Sensex and NSE Nifty 50 indexes rose nearly a per cent each after the Reserve Bank of India' Monetary Policy Committee voted to keep the benchmark repurchase rate at a record low of 4 per cent. The Sensex rallied as much as 558 points and Nifty 50 index touched an intraday high of 11,256.80. The Sensex ended 362 points or 0.96 per cent higher at 38,025.45 and Nifty climbed 98 points or 0.89 per cent to close at 11,200.15.
Governor Shaktikanta Das said the RBI's Monetary Policy Committee unanimously decided to keep the key rates unchanged and maintain an "accommodative" stance, for "as long as necessary to revive growth, mitigate the impact of COVID-19, while ensuring that inflation remains within the target going forward".
Meanwhile, the RBI Governor did not mention about the extension of loan moratorium announced in the wake of Covid-19 pandemic which led to a spike in banking shares. The banking index on NSE - Nifty Bank index - which turned flat ahead of the monetary policy decision, rose as much as 1.5 per cent after the decision.
Gold loan providers surged after the RBI decided to increase the permissible loan to value ratio (LTV) for gold loans to 90 per cent from 75 per cent earlier.
All the 11 sector gauges, barring the gauge of PSU Banks, ended higher led by the Nifty IT index's 1.8 per cent gain.
Mid- and small-cap shares also witnessed buying interest as the Nifty Midcap 100 index rose 1.14 per cent and Nifty Smallcap 100 index advanced 0.4 per cent.
Tata Steel was top Nifty gainer, the stock rose 3.8 per cent to close at Rs 400.50. Infosys, GAIL India, Bajaj Finance, UPL, Zee Entertainment, TCS, HCL Technologies, ICICI Bank and JSW Steel also rose between 2-3 per cent.
On the flipside, Eicher Motors, Shree Cements, Adani Ports, Mahindra & Mahindra, Dr Reddy's Labs, Axis Bank and Bharti Airtel were among the notable losers.
The overall market breadth was positive as 1,579 shares ended higher while 1,079 shares closed lower on the BSE.