The central bank
raised the key policy repo rate in line with economists' expectations, but surprised markets by leaving the door open to more tightening, saying core inflation remained high.
A Reuters poll had showed the RBI would likely raise rates by 25 bps to mark the final increase in its current tightening cycle, before taking a pause for the rest of the year. "Nifty is back in the range that it was for sometime before the Adani fiasco, and we expect a range-bound market for the next few days, said Samrat Dasgupta, chief executive officer of Esquire Capital Investment Advisors.
The Nifty 50 traded in a range between 17,700 and 18,200 in January before a report from U.S. short-seller Hindenburg on the Adani Group stocks triggered a sell-off.
The majority of Adani Group stocks surged for a second
straight day, with the flagship Adani Enterprises and
a top gainer in the metal index, closing 20% higher.
Financial stocks did not gain as much on the central bank's decision, as an indication of more future rate hikes could hurt loan demand, analysts said.
An overnight rally in tech-heavy Nasdaq helped domestic IT stocks advance 1.53%. Metal stocks , which had fallen in the last five sessions, bounced back with an over 3% gain.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Nifty 50 settles at a two-week high ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Rama Venkat in Bengaluru; Editing by Dhanya Ann Thoppil and Eileen Soreng)
