New Delhi [India] : Indian stock benchmark indices stayed in the green on Wednesday, extending gains they accumulated during the previous session. Sensex and Nifty are half a per cent higher from Tuesday’s closing bell.
Benchmark indices Sensex and Nifty rallied nearly 1 per cent on Tuesday following gains in financials, auto and IT shares, recovering from their Monday losses triggered by the Israel-Hamas war.
Multilateral agency IMF raising India’s growth projection too likely supported the stock indices. IMF raised its projection to 6.3 per cent this fiscal year, 20 basis points (100 basis points is equal to 1 percentage point) higher than what it had estimated in its previous report. IMF attributed stronger-than-expected consumption in India during April-June for the upward projection in the growth estimate.
IMG has raised India’s growth outlook for the second time since April – from 5.9 per cent in April, 6.1 per cent in July, and 6.3 per cent now, taking it closer to the 6.5 per cent predicted by the country itself.
The monetary policy committee of the Reserve Bank of India (RBI) in its October review meeting, decided to keep the policy repo rate unchanged at 6.5 per cent, maintaining the status quo for the fourth straight occasion. It too lent some stability to the domestic financial markets. The repo rate is the rate of interest at which the RBI lends to other banks.
‘It is important to appreciate the fact that even in the midst of the West Asian crisis, markets are resilient, globally. The fundamental support to the market comes from the resilience of the US economy, the declining US bond yields and the hope that the Israel-Hamas conflict will remain a localised crisis which will not impact crude prices,’ said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
However, Vijayakumar is of the view that investors should remain cautious since the situation taking a turn for the worse cannot be ruled out.
For fresh cues, all eyes will be on Tata Consultancy Services on Wednesday as it kicks off the domestic Q2 earnings season. Also, Federal Reserve policy minutes from its September meeting will be monitored for any hints on its future course of action.