Sensex up 150 pts, Nifty flat above 24,600 as RBI holds rates

Indian equity benchmarks ended mixed on Wednesday, with the Sensex closing 150 points higher while the Nifty 50 finished flat above the 24,600 mark. The moves came after the Reserve Bank of India's Monetary Policy Committee (MPC) kept interest rates unchanged, a decision that was largely in line with market expectations.

The 30-share Sensex settled at 81,234.56, up 150.23 points, or 0.19 per cent. The broader Nifty 50, however, closed at 24,612.45, up just 8.75 points, or 0.04 per cent, after a choppy session. Traders said the lack of a clear directional trigger kept the market range-bound.

RBI holds repo rate at 6.5%

The MPC, led by RBI Governor, decided to keep the repo rate unchanged at 6.5 per cent for the ninth consecutive meeting. The decision was unanimous, according to the central bank's statement. The standing deposit facility (SDF) rate remains at 6.25 per cent, and the marginal standing facility (MSF) rate at 6.75 per cent.

The central bank maintained its 'neutral' stance, signalling that it is in no hurry to cut rates. This was widely anticipated by economists and market participants, who had priced in a status quo. The focus now shifts to the RBI's commentary on inflation and growth, which will guide future policy actions.

Market reaction: muted but positive

The market's initial reaction was subdued, with the Nifty slipping into the red in early trade before recovering. Buying emerged in select heavyweights, particularly in banking and IT stocks, which helped the Sensex close in positive territory. However, the Nifty's flat close suggested a lack of conviction among investors.

Analysts said the rate decision was a non-event for the market, as it was fully expected. "The policy was on expected lines. The market is now looking for cues from the global front, especially the US Federal Reserve's stance," said a senior fund manager at a domestic mutual fund.

Sectoral trends: banks lead, autos lag

Banking stocks were among the top gainers, with the Nifty Bank index rising 0.5 per cent. Private sector lenders such as HDFC Bank and ICICI Bank contributed significantly to the Sensex's gains. IT stocks also saw some buying interest, supported by a weaker rupee.

On the other hand, auto stocks were under pressure, with the Nifty Auto index declining 0.3 per cent. Metal and realty stocks also traded mixed. The broader market was slightly negative, with the BSE Midcap index down 0.1 per cent and the Smallcap index flat.

What lies ahead for the market

With the RBI policy out of the way, investors will now turn their attention to corporate earnings, global inflation data, and the trajectory of the US Federal Reserve's rate cuts. Any surprise in the US inflation print could impact global risk sentiment.

Domestically, the market is also watching the progress of the monsoon and its impact on food prices, which remain a key concern for the RBI. A sustained fall in retail inflation would open the door for rate cuts later this year, which could provide a fresh impetus to equities.

For now, the market appears to be in a wait-and-watch mode, with the Nifty likely to stay in a range until a clearer direction emerges from global and domestic data points.