Sensex, Nifty jump over 200 points ahead of RBI decision on rates

NEW DELHI: Markets perked up on Wednesday, as value buying set in ahead of a decision on monetary policy by the Reserve Bank of India (RBI) where it is widely expected to keep benchmark interest rates on hold.

An increasing number of economists expect the central bank to raise interest rates, a Reuters poll showed, but most still think it will stay put and use this week’s meeting to prepare for a rate increase in August.

An unexpected surge in inflation and economic growth rates have brought forward expectations for the next rate hike by more than a year, when just over a month ago, the RBI wasn’t expected to raise rates until the second half of 2019.

At 2:10 pm, the broader NSE Nifty was up 0.73 per cent or 76 points at 10,671, while the benchmark BSE Sensex was 0.67 per cent or 235 points higher at 35,138.

“There is expectation of some relief move from the RBI meeting, while the early onset of the monsoon is also giving some kind of support,” said Anand James, chief market strategist at Geojit Financial Services.

“Three days of selling have found some fresh buyers, because of which there is value buying happening at lower levels...”

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National Stock Exchange of India Ltd (NSE)