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![Sensex, Nifty Pull Back From Record Highs As RBI Leaves Rates Steady Sensex, Nifty Pull Back From Record Highs As RBI Leaves Rates Steady](https://i.ndtvimg.com/i/2017-02/sensex-650_650x400_81487760043.jpg)
Indian equity benchmarks retreated from all-time highs on Friday, after the Reserve Bank of India kept interest rates at record lows while also retaining its accommodative stance. Ahead of the RBI’s monetary polciy decision, the Sensex over 450 points to hit record high of 51,073.27 and Nifty 50 index surged above its important psychological level of 15,000.
The Reserve Bank of India kept rates steady, as widely expected, and reiterated that it will continue to support the recovering economy by ensuring ample rupee liquidity in the banking system.
The Sensex rose 291 points to 50,905 and Nifty 50 index was up 87 points at 14,983, as of 12:18 pm. Meanwhile, the rupee strengthened to 72.94 against the dollar following the central bank’s announcement.
“The MPC’s (monetary policy committee) decision is more or less in line with expectations. There was nothing in the announcement to help propel the markets higher,” Neeraj Dhawan, director at Quantum Securities told Reuters.
“Banking stocks are helping the indexes to hold on to gains and we are seeing some profit-taking as markets were at high valuations,” he added
Gains on the Nifty 50 were supported by State Bank of India, which surged as much as 15 per cent to a record high. The lender on Thursday reported a 7 per cent fall in its quarterly net profit, but beat analysts’ estimates.
The Nifty PSU Bank index, which tracks state-run lenders jumped 6.5 per cent, while the Nifty Banking index added nearly 3 per cent.
Benchmark indexes, which closed at record highs on Thursday, are set to see a weekly gain of over 9 per cent on optimism around the measures announced in the federal budget.
The RBI has already cut its key interest rate by a total 115 basis points since March 2020 to revive growth and cushion the impact of the COVID-19 pandemic.
The health crisis is expected to trigger India’s biggest annual economic contraction in decades, and high inflation remains a cause of concern.
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