The market is going steady but IT stocks are under pressure. The Sensex is up 67.39 points or 0.2 percent at 28288.37 and the Nifty is up 23.10 points or 0.3 percent at 8767.05. About 1640 shares have advanced, 885 shares declined, and 122 shares are unchanged.
GAIL, Reliance, ONGC, BHEL and HUL are top gainers while Infosys, Axis Bank, ICICI Bank, Cipla and Dr Reddy’s Labs are top losers in the Sensex.
The Reserve Bank of India has embarked on a significant but potentially risky shift towards greater tolerance of higher inflation under new governor Urjit Patel, prompting markets to price in another rate cut.
On Tuesday, Patel and the newly formed monetary policy panel cut the policy rate by 25 basis points and softened the RBI’s stance on the timeline for meeting its inflation target, indicating that it had until 2021 to reach it.
And by lowering its real interest rate target to 1.25 percent, from the 1.5-2 percent band set by Patel’s predecessor Raghuram Rajan, the RBI gave itself more room to cut rates further.
The moves sent the benchmark 10-year bond yield down to a more than 7-year low on Wednesday, on expectations of another rate cut, either in December or February.