Stock indices closed at record high on Tuesday as the Reserve Bank of India (RBI) kept the policy rates unchanged and also succeeded in convincing the market participants that it may not hike the rates in the near-term.

The benchmark Bombay Stock Exchange (BSE) 30-share Sensitive Index (Sensex) closed at 22446.44 with a gain of 60.17 points or 0.27 per cent.

The rally was led by information technology stocks (up1.65 per cent) followed by consumer durables and oil and gas (1.09 per cent).

On the National Stock Exchange, the 50-share Nifty gained 16.85 points to close at 6721.05.

“The steady narrowing of trade deficit over the year has shrunk the current account deficit (CAD) to 0.9 per cent of GDP in third quarter of 2013-14. For the year as a whole, the CAD is expected to be about 2 per cent of GDP versus 4.8 per cent last year. This puts India into a relatively comfortable position compared to other emerging market peers given the uncertain external environment,” said Varun Goel, Head PMS, Karvy Stock Broking Ltd.

“In the backdrop of the Urjit Patel committee report, markets were at best expecting a status quo on rates with a slim probability of repo rate hike…….I believe that the primary respite is expected from further moderation in food prices and further policy tightening is not anticipated. In case the trajectory for inflation decelerates as expected, the RBI is likely to gradually ease policy stance,” said Dinesh Thakkar Chairman & Managing Director, Angel Broking.

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