Backed with RBI surprise move to keep key rates unchanged, the benchmark Sensex surged 247.72 points, for the first time in the last seven session, to 20,859.86. The broader index Nifty also gained 78.10 points to 6,217.15 while rupee came under pressure and depreciated by eight paise to Rs 62.09 per dollar from the fear of US Federal Reserve tapering its stimulus program.
Stock markets rallied as all sectoral indices on BSE ended the session with gains led by real estate index as it rose by 3.51 per cent. Apart from that capital goods, oil & gas and power indices also gained by 2.61 per cent, 2.15 and 2.09 respectively.
Out of the 30 shares comprising Sensex, 27 stocks ended the session with gains and of Nifty, off the 50 stocks, 46 surged. Overjoyed by RBI's move, foreign institutional investors (FII) were again seen investing heavy in the Indian markets. As per the provisional data provided by the stock exchanges, FIIs invest Rs 1,198.6 crore in the stock markets on Wednesday. The total market breadth was positive as 1,497 stocks finished higher while 951 closed lower.
While stock markets rallied, rupee came under pressure towards the end of the session as concerns about the US Federal Reserve tapering its stimulus program outweighed the RBI's surprise status quo decision on interest rates. Demand from importers for the dollar, which strengthened overseas, also put pressure on the rupee, while sustained capital inflows restricted the fall.
"Rupee was immediately seen appreciating after RBI policy but it was a short-lived impact. later in the session, rupee was seen weakening ahead of the next important event of the day, the Fed's decision on quantitative easing, which will decide the further direction of the market," said Abhishek Goenka, CEO of India Forex Advisors.