RBI's gradualism fires up bulls on Dalal St

Mumbai: The BSE Sensex skyrocketed 1,016 points, while the Nifty rallied past the 17,400-mark on Wednesday as easing concerns over the Omicron variant and RBI's accommodative policy stance galvanised investor sentiment. Bulls were enthused by a positive trend in global markets amid reports that the new coronavirus strain is unlikely to be more severe than the Delta variant, removing market concerns regarding its economic impact.

Extending its winning run to the second straight session, the 30-share BSE Sensex zoomed 1,016.03 points or 1.76 per cent to finish at 58,649.68. This was its biggest single-day jump since March 30 this year, when it had surged 1,128.08 points. Similarly, the broader NSE Nifty rallied 293.05 points or 1.71 per cent to 17,469.75.

"Fears over Omicron faded as recent reports suggested that the new virus isn't deadly as earlier anticipated and this helped the market to add-on to recent strong gains. The market turned positive over RBI's continued accommodative stance and MPC kept the rates unchanged. The GDP forecast for FY22 remained high at 9.5 per cent showing confidence over economic recovery and inflation forecast is below the market estimates," said Vinod Nair, head (research) at Geojit Financial Services.

S Ranganathan, head (research) at LKP Securities, adds: "Positive global cues, coupled with the continuation of an accommodative policy stance of the RBI by holding rates fired up the bulls even as the central bank decided to enhance the variable reverse repo rate auctions to rebalance liquidity."