BENGALURU, Sept 30 (Reuters) – Indian stocks rose on Friday to record their best quarter in a year, boosted by banks and metals stocks, after the country’s central bank raised its key rate for the fourth consecutive time , which should bring down persistently high inflation.
The NSE Nifty 50 Index (.NSEI) ended up 1.6% at 17,094.35, and the S&P BSE Sensex (.BSESN) gained 1.8% at 57,426.92. Both indexes posted their biggest percentage increases in a month, snapping a seven-day losing streak.
The Nifty and Sensex ended up more than 8% this quarter.
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The Reserve Bank of India (RBI) has now raised interest rates by a total of 190 basis points since its first unanticipated mid-session hike in May, but inflation remains stubbornly high – a phenomenon affecting much of the world economy. Read more
“The fact that there were no negative surprises is what is positive for the markets. It is also positive that inflation expectations have held up,” said Hemali Dhame, associate vice president, research. , Kotak Securities Ltd.
The rate-sensitive Nifty Bank index (.NSEBANK) rose 2.6%, while financials (.NIFTYFIN) gained 2.2% and metals (.NIFTYMET) added 2.2%.
“The banking industry is going to do well basically on its own. Their credit growth is strong…If there’s enough liquidity, banks won’t have to aggressively raise deposit rates, which means they can see margin expansion in the short term,” Dhame said.
Hindalco Industries (HALC.NS) was the top gainer on the Nifty 50 Index, up 5.2%.
The RBI, which has been spending massive foreign exchange reserves to halt the rupiah’s slide against US dollar strength, said the context of foreign exchange reserve adequacy is always kept in mind during its interventions.
The RBI has signaled that FX interventions should continue to defend against any extreme volatility in the rupiah, said Sakshi Gupta, senior economist at HDFC Bank.
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Reporting by Rama Venkat and Nallur Sethuraman in Bengaluru; Editing by Dhanya Ann Thoppil, Savio D’Souza and Rashmi Aich
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