Investors joined industry groups, fund managers and bankers in welcoming the RBI\u2019s growth-supportive monetary policy on Wednesday with a rally in banking stocks lifting the benchmark S&P BSE Sensex.<\/p>\n
The 30-share Sensex jumped 460.37 points, or 0.94%, to close at 49,661.76. Banks led the gains with State Bank of India climbing 2.25% and ICICI Bank advancing 2.05%.<\/p>\n
\u201cThe momentum [in the market] accelerated post the RBI monetary policy as lot of banking counters started rebounding sharply,\u201d said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking. \u201cThe up move was mainly propelled by the banking space,\u201d he added. <\/p>\n
\u201cThe RBI policy statement is a clear commitment to assuage uncertainties in the market through guaranteed, continued liquidity support and explicit guidance to navigate through the current COVID surge, the duration of which is uncertain,\u201d said SBI Chairman Dinesh Khara. \u201cPermitting banks to co-lend through NBFCs and bringing it under PSL guidelines will broad-base lending,\u201d he added.<\/p>\n
The RBI on Wednesday stressed that as part of retaining its accommodative policy stance, it would stick to its commitment to ensure ample system liquidity. As part of its liquidity measures it said it was putting in place a secondary market G-sec acquisition programme or G-SAP 1.0. <\/p>\n
\u201cIndian market is invigorated by RBI\u2019s long-term dovish stance till the economy reverts to normalcy,\u201d said Vinod Nair, Head of Research, Geojit Financial Services. \u201cA big cheer is the G-Sec buying program of \u20b91 lakh crore to ensure liquidity and flatten the long-term yield curve. RBI\u2019s decision to maintain its high GDP growth forecast also helped calm the market over its fears about the second wave of infections,\u201d he added.<\/p>\n
\u201cBeset with multiple challenges, the foremost being the uncertainty stemming from the second wave and rising inflationary risks, the RBI did well to hold the policy rates while continuing the accommodative stance,\u201d said Chandrajit Banerjee, Director General, CII. <\/p>\n
Commenting on the secondary market G-Sec acquisition programme, Sampath Reddy, CIO, Bajaj Allianz Life Insurance said, \u201cit indicates an intention to calendarise its [RBI\u2019s] G-sec purchases and will help to manage the yield curve and may help to reduce the term premium as well.\u201d<\/p>\n
A. K. Das, Managing Director & Chief Executive Officer, Bank of India said the policy announcement represented a balanced approach to make economic revival deep-rooted, to ensure orderly development of financial markets and keep price movement at manageable levels.<\/p>\n