By Malvika Gurung
Investing.com -- Indian equity benchmark indices ended higher on Friday after a day’s break, closing the week on a positive note.
The domestic market welcomed the RBI MPC outcome of raising the repo rate by 50bps to 5.4% on Friday even though the decision was slightly on the hawkish side. The central bank also reatined its Withdrawal of Accommodation stance to keep a check on the mounting inflation, largely in line with the Street’s expectations.
Cement stocks Shree Cements (NS: SHCM ) and UltraTech Cement (NS: ULTC ), and private lender ICICI Bank (NS: ICBK ) were top gainers on Nifty50, rising over 2% each, while Britannia (NS: BRIT ), Hindalco (NS: HALC ) and Eicher Motors (NS: EICH ) declined over 2%, pulling the index lower.
“As compared to market expectation, RBI Monetary Policy has been slightly on the hawkish front with 10Y Gsec moving above at 7.30 levels. Inflationary pressure still continues but growth also remains a concern for central banks, thus trying to balance the inflation-growth dynamics,” said Kunal Sodhani, Vice President, Global Trading Center, Shinhan Bank.
"The hike was a bit sharper than we expected, but in keeping with the RBI wanting to stay ahead of the curve as far as inflation is concerned. We believe that this will allow the RBI some room to pause if the recent moderation in commodity prices was to sustain. With the monsoon going well and global food shipments resuming, food inflation is expected to moderate as well. All of this portends well for the Indian Markets”, stated Rajiv Shastri, Director and CEO, NJ Mutual Fund.
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