Top gainers in the Sensex pack included Yes Bank, TechM, Bajaj Finance, Bharti Airtel, Maruti, Asian Paints and Hero MotoCorp - rising up to 5.30 per cent. The 50-share Nifty ended 85.65 points, or 0.79 per cent, higher at 10,948.25 points.
The stock markets, which had opened in the green on rate cut hopes, tumbled after the monetary policy announcement.
In the Sensex pack, Hero MotoCorp, IndusInd Bank, Bajaj Auto, Maruti and M&M were the top gainers, spurting up to 2.66 per cent.
Jaitley said inflation has been under control for long and is likely to remain so on the back of good monsoon and unlikely spike in oil prices.
Seeking to dispel possible notions of the RBI not having done enough by opting for a pause for the second consecutive time, Das said the RBI has a wide dashboard of instruments beyond rates that can be deployed.
In the last three years, public sector banks have responded to the RBI's policy rates more strongly than private banks.
The seasonally adjusted Nikkei India Services Business Activity Index fell to 50.2 in May, from 51.0 in April, pointing to the slowest growth rate in the current 12-month stretch of expansion.
In its Fifth Bi-monthly Monetary Policy Statement, 2017-18, RBI said the second quarter growth was lower than the one that was projected in the October review, and the recent increase in oil prices may have a negative impact on margins of firms and Gross Value Added (GVA) growth.
After unseasonal rains, supply disruptions and pandemic-induced woes pushed retail inflation well over the Reserve Bank's comfort zone in 2020, the scenario is likely to stay that way at least in the short term as economic recovery slowly gains foothold. For most part of this year, pricier food items pushed the retail inflation, based on Consumer Price Index (CPI), higher in the range of 6.58-7.61 per cent, except for March when the reading was 5.91 per cent. Experts believe retail inflation is likely to average around 6.3 per cent this fiscal and mostly will remain sticky going forward owing to pick-up in demand across sectors.
The Indian economy appears to have slowed down in 2018-19 due to lower private consumption, tepid growth in fixed investment and muted exports, a finance ministry report has said.
In the current fiscal so far, retail inflation stabilised around 5 per cent, while wholesale price-based inflation averaged around 2.9 per cent during April-December.
For July-September, it pegged CPI-based retail inflation at 4.2 per cent which it saw firming up to 4.8 per cent in the second half of the current fiscal.
For the first time, the value of card and mobile payments of Rs 10.57 trillion was more than ATM withdrawals of Rs 9.12 trillion in Q4 of fiscal 2019-20. In the months of lockdown, the gap may have widened further, but cash could be back in vogue when the situation normalises.
'If the RBI now only prints Rs 100 in small denomination notes and the remaining amount is printed in Rs 500 and Rs 2,000 denominations, then by March-end the central bank can completely normalise the cash crunch situation.'
Wednesday's hawkish and essentially courageous decision underscores that Governor Urjit Patel will largely represent continuity, rather than a break, with the policies and approach of his predecessor, says Richard Iley.
While the RBI can nudge things along, ultimately bank owners must recapitalise and review internal processes to ensure that a culture of irresponsible lending doesn't continue, says Devangshu Datta.
Instead of a rate hike, or even a pause, there could be a window for the RBI for an interest rate cut
The headline seasonally adjusted Nikkei India Composite PMI Output Index, that maps both the manufacturing and services sectors, rose from 53.3 in June to 54.1 in July.
The S&P BSE Midcap and the S&P BSE Smallcap indices added 0.5% and 0.7%, respectively
'There are deliberations on whether there can be lowering of income taxes and other sops to keep more money in the hands of taxpayers, enabling them to spend more and boost demand.'
The Monetary policy committe comprising 6 members voted 6-0 in the favour of the rate cut.
After stripping Pluto of planet status in 2006, some astronomers want to reclassify it once again, says Devangshu Datta.
RBI has pegged the GVA growth of 7.6 per cent for the current fiscal and 7.9 per cent the year after
'Prime Minister Modi stated several times that we shall not let this challenge go away without converting it into an opportunity to undertake systemic reforms.' 'And hasn't that been reiterated in action?'
The fifth meeting of Monetary Policy Committee maintained the repo rate, at which it lends to the banks, at 6.25 per cent and the reverse repo, at which it borrows, will be 6 per cent.
Delivering a public speech hours after the RBI launched a rescue act for Yes Bank on March 6, Governor Shaktikanta Das reiterated the RBI's affirmation to do whatever was needed to combat the coronavirus impact. On that day, India had only one confirmed COVID-19 infection, the World Health Organisation was five days off from declaring it as a pandemic and the financially debilitating lockdowns were not even on the horizon. Das' promise on efforts to mitigate COVID-19 impact appeared as a footnote in news reports from the event.
This is the ninth consecutive month that the manufacturing PMI remained above the 50-point-mark.
SBI was the biggest loser in the Sensex pack, shedding 2.40 per cent, followed by Yes Bank, Bharti Airtel, L&T, Sun Pharma, M&M, ICICI Bank, ONGC, RIL, Asian Paints, Vedanta and HUL, which lost up to 2.37 per cent.
Going forward, the February factory output may be impacted as several industries such as automobiles, technology, pharma and fashion have some exposure to imports of raw and intermediate materials from China.
While a pick-up in summer monsoon rains in recent weeks is expected to cool food inflation, most analysts don't anticipate another rate cut before a new governor is on the job
'Most importantly, marking a departure from the past, the RBI has made it clear that it is not overtly worried about the level of the local currency,' notes Tamal Bandyopadhyay.
Takeda had filed a case of patent infringement in response to Zydus' abbreviated new drug application.
Both the indices closed at five-month highs, led by financial services, IT and metal stocks, amid persistent foreign fund inflows.
With enough liquidity in the system, lending and deposit rates are likely to fall further
'Credit expansion is probably the quickest way to get the economy going again.' 'Easy credit is like a shot of nitro in a race car: In timely, small, quick, doses it can give a tremendous boost but carried to extreme it can destroy the engine,' points out S Muralidharan, former managing director, BNP Paribas.
Inflation in the 'fuel and power' basket in December slumped to 8.38 per cent, nearly half of 16.28 per cent.
Lower interest rates needed to boost manufacturing, officials say.
However, growth is expected to bounce back to an average of 7.3 per cent in the second half of 2017 and 7.7 per cent in 2018
Currently, the retail inflation is well below the RBI's comfort level. The government has asked the central bank to keep inflation in the range of 4 per cent.
The public sector banks are not in a position to cut rates because of their weak balance sheets and massive portfolios of non-performing assets, says Devangshu Datta.
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