The equity benchmark indices snapped their three-day losing streak on Wednesday even as the RBI raised the repo rate for the first time in more than four years.
The Sensex gained 275.67 points or 0.79% to close at 35,178.88. The broader Nifty of the National Stock Exchange closed at 10,684.65, up 91.50 points or 0.86%.
Incidentally, both the indices pared a large part of the early gains during the afternoon session after the central bank increased the repo rate by 25 basis points to 6.25% but managed to recover lost ground and end in positive territory.
The market breadth was also strong as mid-caps and small-cap stocks also gained ground after the recent bout of selling. On BSE, more than 1,600 stocks advanced as against only 994 declines. Both, the BSE Smallcap and BSE Midcap indices gained more than 1% each.
“RBI changed the rate little higher as at this juncture that was the best thing to do,” said Motilal Oswal, chairman & managing director, Motilal Oswal Financial Services Ltd.
‘Little expensive’
“At current levels, markets are looking little expensive but for a reason of expectation of earning momentum kicking in. We think even the mid cap correction is overdone and selectively mid-caps should start stabilising,” he added. A strong trend in the Asian markets also acted as a catalyst.
