Markets See Sharp Recovery After RBI’s 50-bps Rate Cut Decision

Sensex recovers 400 points, cheering RBI’s decision to cut repo rate by 50 basis points.

Markets cheered RBI’s surprise move. (Photo: Reuters)

Equity benchmark Sensex rallied nearly 500 points from day’s low on Tuesday after the Reserve Bank of India beat expectations to cut benchmark policy rate by 50 basis points, providing a potent counter to the weakness seen in global equity markets.

By the close of trade, the Sensex rose 161.82 points or 0.63 percent to 25778.66 at the close and the Nifty climbed 47.60 points or 0.61 percent to 7843.30.

HDFC, Maruti Suzuki, M&M, Coal India, Larsen & Toubro and IndusInd Bank topped the buying list, up 1-3.5 percent. However, Vedanta crashed 5.4 percent followed by Tata Steel, Hindalco, BPCL and Adani Ports with 3-4 percent loss.

The rupee recovered 20 paise from the day’s low to trade at 66.17 post Reserve Bank of India’s move to cut rates. The rupee declined by 33 paise to 66.37 against the US dollar early on Tuesday.

Most Asian markets traded sharply lower as investors joined a global selloff amid deepening worries about the world economy. Japan’s Nikkei shed 3 per cent in trade while Hong Kong’s Hang Seng index slipped over 700 points. China’s Shanghai Composite also traded weak, down by 1.5 per cent.

(With agency inputs)