Boosters to enhance liquidity lift markets

There was widespread optimism among investors on the slew of measures announced by the RBI to address liquidity concerns for housing, micro, small, and medium enterprises (MSMEs), and flow of credit in corporate bond markets.

Stock markets surged on Thursday after the Reserve Bank of India (RBI) left key interest rates unchanged while announcing measures to boost liquidity and lift the sagging economy amid the Covid-19 crisis. The BSE Sensex closed at 38,025.45, up 362.12 points or 0.96%, while the 50-share Nifty was at 11,200.15, up 98.50 points or 0.89%.

Most bank stocks rallied with the BSE Bankex closing nearly 1% higher as there was no extension of moratorium, while one-time restructuring is now allowed by RBI with strict conditions.(Bloomberg Photo)

There was widespread optimism among investors on the slew of measures announced by the RBI to address liquidity concerns for housing, micro, small, and medium enterprises (MSMEs), and flow of credit in corporate bond markets.

Most bank stocks rallied with the BSE Bankex closing nearly 1% higher as there was no extension of moratorium, while one-time restructuring is now allowed by RBI with strict conditions.

The monetary policy committee’s (MPC’s) caution on uncertainty on the inflation trajectory suggests that chances of further easing will remain a function of supply-side shocks, said analysts.

Meanwhile, the Indian rupee was up 0.01% closing at 74.93 against the US dollar. The 10-year bond yield stood at 5.81, rising 4 basis points.