By RTT News,
December 18, 2013, 06:24:00 AM EDT
(RTTNews.com) - The Indian markets rallied on Wednesday after the Reserve Bank of India (RBI) unexpectedly left its key rates unchanged, saying it will wait for more data, including the decision of the U.S. Federal Reserve on stimulus tapering, before taking calibrated actions in future. Despite rising inflationary pressures, the RBI left the repo rate and the cash reserve ratio unchanged.
"The policy decision is a close one," Governor Raghuram Rajan said. The central bank will act if food prices do not soften in months ahead and reduce the overall inflation, Rajan told reporters.
RBI's positive surprise cheered investors, helping to lift the benchmark BSE Sensex up 247.72 points or 1.2 percent to 20,859.86. The broader Nifty index jumped 78.10 points or 1.27 percent to 6,217.15.
Realty, capital goods, power, oil/gas and banking stocks led the rally. The decision to keep interest rates unchanged is aimed at boosting growth, Planning Commission Deputy Chairman Montek Singh Ahluwalia said.
BHEL led the gainers in the Sensex pack with a 6 percent rally, while ONGC, Reliance Industries, HDFC, SBI, Larsen & Toubro, Hero MotoCorp, Bajaj Auto and Tata Motors climbed 2-4 percent.
TCS gained half a percent after deploying its BaNCS core banking solution for Australian group MyState.
Ashok Leyland rallied 2 percent. The manufacturer of commercial vehicles on Tuesday sold 18 lakh IndusInd Bank shares worth around Rs.75 crore.
Larsen & Toubro climbed 2.9 percent on bagging a Rs. 2,935 crore electrical contract in Qatar. Biocon soared over 12 percent to hit a three-year high after the company inked a licensing pact with U.S.-based Quark Pharmaceuticals, Inc.
Kotak Mahindra Bank rose 1.3 percent as it unveiled plans to increase focus on rural India. Godrej Industries jumped 3.2 percent after ICRA upgraded the ratings of its public deposit program.
Trent shares soared 11 percent after U.K.-based Tesco Plc. announced its intention to acquire a 50 percent stake in the Tata Group firm for $110 million. Rival Shoppers Stop added 5 percent while Future Retail advanced 7.3 percent on stake sale reports.
Redington India tumbled 4.3 percent on being appointed as a national distributor by Palo Alto Networks for distribution of network security products. UltraTech Cement slipped 0.3 percent, SesaSterlite dropped 0.6 percent and Jindal Steel shed 0.9 percent.
The Asian markets ended mixed as investors awaited the outcome of Federal Reserve's policy meeting and Chairman Ben Bernanke's news conference later in the day.
With overnight data illustrating a lack of inflationary pressures, investors are pinning hopes that the tapering will start either in January or March. If there is a taper, many believe that it will begin with modest reductions.
European stocks traded higher in early trading ahead of the Fed's policy statement.
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