Sensex, Nifty Stage Gap Up Opening Ahead Of RBI's Monetary Policy Decision

The Indian equity benchmarks staged a gap up opening on Wednesday ahead of Reserve Bank of India's monetary policy decision due later in the day. The Sensex rose over 700 points and Nifty 50 index reclaimed its important psychological level of 17,350 led by gains in rate sensitive banking, financial services and real estate shares. Analysts expect the RBI's Monetary Policy Committee to hold interest rates at record lows while maintaining its accommodative stance.

As of 9:28 am, the Sensex was up 1.2 per cent or 685 points at 58,318 and Nifty 50 index advanced 207 points or 1.2 per cent to 17,383.

Meanwhile, Asian shares extended gains on Wednesday, continuing a global relief rally as markets found positive news in early reports about the potential impact of the Omicron variant, although overnight advances in oil prices began to peter out.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 per cent and Japan's Nikkei rose 1 per cent. U.S. S&P 500 futures rose 0.25 per cent.

Investor sentiment got a boost on hopes that the Reserve Bank of India will likely hold off on raising its key borrowing and lending rates on Wednesday, as it adopts a cautious tone amid the spread of the Omicron coronavirus variant, economists and market participants said.

Fifty economists surveyed by Reuters in a December 1-3 poll expect the RBI to hold its benchmark repo rate at 4.00 per cent.

Buying was visible across the board as all the 15 sector gauges compiled by the National Stock Exchange were trading higher led by the Nifty IT index's 2.2 per cent gain. Nifty Bank, Financial Services, Auto, Private Bank, Realty and Oil & Gas indices also rose over 1 per cent each.

Mid- and small-cap shares were also witnessing buying interest as Nifty Midcap 100 index rose 1 per cent and Nifty Smallcap 100 index climbed 1.4 per cent.

Wipro was top Nifty gainer, the stock rose 2.84 per cent to Rs 650. HCL Technologies, Infosys, Tech Mahindra, ONGC, Bharti Airtel, Bajaj Finance, Reliance Industries, ICICI Bank and Bajaj Finserv also rose between 1.5-2.6 per cent.

On the flipside, NTPC, Hindalco and Coal India were among the notable losers.

The overall market breadth was extremely positive as 2,085 shares were advancing while 506 were declining on the BSE.