RBI’s GDP Forecast Boosts Market Sentiment; Sensex, Nifty Rise Nearly 2%

RBI’s GDP Forecast Boosts Market Sentiment; Sensex, Nifty Rise Nearly 2%

Mumbai: Indian benchmark indices Sensex and Nifty rallied nearly 2% on Thursday after the Reserve Bank of India (RBI) released its latest quarterly macroeconomic update. The positive GDP forecast and dovish commentary from the central bank boosted investor sentiment.

The Reserve Bank of India (RBI) has projected India’s real GDP growth for FY23 at 6.8%, higher than its previous forecast of 6.1%. The central bank cited a resilient economy, improving manufacturing and services sector activity, and robust exports as factors driving the upward revision.

The RBI’s forecast is in line with expectations from economists and analysts. The central bank’s decision to maintain a dovish stance on monetary policy also supported market sentiment. The RBI kept the repo rate unchanged at 5.90% and maintained an accommodative stance.

The Sensex jumped 514.93 points, or 0.93%, to close at 55,253.94. The broader Nifty rose 143.45 points, or 0.85%, to end the day at 16,724.25.

All sectoral indices on the NSE ended in the green. The Nifty Bank index surged 1.85%, while the Nifty IT index gained 1.39%. Other notable gainers included the Nifty Auto index, Nifty FMCG index, and Nifty Metal index.

“The RBI’s positive assessment of the economy and dovish stance have boosted investor sentiment,” said Vinod Nair, Head of Research at Geojit Financial Services. “The market is optimistic that the economy will continue to recover and that corporate earnings will improve in the coming quarters.”

The rally in the Indian stock market was also supported by positive global cues. Asian stocks rose on Thursday following overnight gains on Wall Street. Investors were also encouraged by a report from the US Department of Labor showing a decline in jobless claims.

Analysts believe that the Indian stock market is likely to maintain its positive momentum in the near term. However, they caution that investors should remain vigilant and focus on quality stocks with strong fundamentals.