The Indian equity benchmarks staged a strong up move for second straight session on Wednesday after the Reserve Bank of India (RBI), as widely expected, held interest rates steady at all-time low and maintained its accommodative stance for as long as necessary to support growth. The Sensex rose as much as 1,069 points and Nifty 50 index touched an intraday high of 17,485 led by gains in index heavyweights like Infosys, ICICI Bank, HDFC Bank, Reliance Industries and Bajaj Finance.
The Sensex advanced 1,016 points to close at 58,650 and Nifty 50 index climbed 293 points to end at 17,470. In the last two trading sessions, the Sensex and Nifty have gained over 3 per cent.
The RBI held its key lending rate at a record low on Wednesday, saying growth was a priority as it warned of risks from inflation and the new Omicron variant on the economic recovery.
Even as the Reserve Bank of India retained its accommodative policy stance, it outlined plans to drain surplus liquidity in the banking system, raising the chances of a hike in a key borrowing rate early next year.
The central bank's monetary policy committee held the lending or repo rate at 4 per cent. The reverse repo or borrowing rate was also kept at 3.35 per cent.
All 50 economists polled by Reuters had expected no change in the repo rate and did not expect a change before the second half of 2022.
Buying was visible across the board as all the 15 sector gauges compiled by the National Stock Exchange ended higher led by the Nifty PSU Bank index's over 2.5 per cent gain. Nifty Bank, Media Auto, Information Technology, Financial Services, Metal, Pharma, Private bank and Realty indices also advanced between 1.5-2.5 per cent.
Mid- and small-cap shares also witnessed buying interest as Nifty Midcap 100 index advanced 1.6 per cent and Nifty Smallcap 100 index rose 1.83 per cent.
Bajaj Finance was top Nifty gainer, the stock rose 3.6 per cent to close at Rs 7,360. Maruti Suzuki, Hindalco, State Bank of India, Bajaj Finserv, Asian Paints, ICICI Bank, Tata Motors, Bharti Airtel, Sun Pharma, Infosys and Adani Ports also rose between 2-3.2 per cent.
On the flipside, HDFC Life, Kotak Mahindra Bank, Power Grid, Divi's Labs and Indian Oil were among the notable losers.
The overall market breadth was extremely positive as 2,329 shares ended higher while 949 closed lower on the BSE.