The stock markets on Wednesday cheered Reserve Bank of India Governor Raghuram Rajan’s unexpected decision to maintain a status quo on interest rates with benchmark Sensex rising for the first time in 7 days and ending nearly 248 points higher on the back of heavy buying in banking, realty and auto shares.

Overall, nearly 1,500 stocks, or 6 out of every 10 traded on BSE rose, helping investor wealth rise by Rs 85000 crore.

The BSE Sensex rose by 247.72 points, or 1.20 per cent, to 20,859.86. Also, the broad-based NSE index Nifty shot up by 78.10 points, or 1.27 per cent, to end at 6,217.15.

RIL, HDFC and L&T lifted the 30-share Sensex where Tata Power and BHEL were among best performers in the 27 that rose.

The RBI in its mid-quarter policy review kept the repo rate on hold at 7.75 per cent against the market expectation of 0.25 per cent hike. The cash reserve ratio was also kept unchanged at 4 per cent.

After wholesale and retail inflation data came on the higher side, fears of a repo rate hike dragged down Sensex by over 714 points in previous six sessions after hitting life-time high on December 9.

“RBI’s decision to hold rates and the mention to announce off-policy action if need be, suggests RBI buying time ahead of Fed’s impending decision on QE tapering,” said Dhananjay Sinha, Head, Institutional Research, Emkay Global Financial.

The most interest-sensitive Realty sector index gained the most by rising 3.51 per cent. Besides, the Capital Goods sector was second best performer (2.61 per cent), followed by Oil and Gas index (2.15 per cent), Banking index (1.40 per cent) and Auto index (1.73 per cent).

RELATED NEWS

Gold import curbs will spur smuggling: RBI December 18, 2013

RBI leaves rates unchanged December 18, 2013

More In: Markets | Business