Market hails Rajan's surprise rate cut; Nifty soars 217 pts

Indian markets logged their biggest single-day rally in over five years with the NSE Nifty index today surging nearly 217 points after RBI Governor Raghuram Rajan cut interest rates in an unscheduled review.
Signaling renewed optimism, the surprise rate cut spurred a wave of buying across the board and sent the benchmark Nifty surging by 216.60 points, or 2.62 per cent to finish at 8,494.15 on the National Stock Exchange after scaling an intra-day high of 8,527.10. Nifty was the best performer among Asian peers.
The surprise rate cut comes before Prime Minister Narendra Modi's government unveils its full fiscal budget next month.

After a gap of over one-and-a-half years, the RBI slashed its repo-rate by 25 basis points to 7.75 percent from 8 per cent.
RBI Governor Raghuram Rajan in its policy review in December 2014 had stated that it would consider rate cuts outside schedules if there is marked improvement in inflation expectations and guided markets towards more accommodative monetary policy stance.
Better-than-expected growth rate of 5.3 per cent in the July-September quarter alongiwith continuing disinflationary pressures as well as strong fiscal consolidation against the backdrop of plunging international commodity prices predominantly giving an upper hand in rate cut decision.

The apex bank is scheduled to announce the next policy review on February 3.

After a gap-up opening, bourses continued their stellar rally with stocks hitting multi month highs.
Sectorally, CNX Realty index staged a nice rally among peers, surging by a massive 8.32 per cent. It was followed by the Bank 3.4 per cent, Infra 2.57 per cent, Energy, 2.49 per cent, Auto 2.22 per cent, FMCG 1.54 per cent, Metal 1.03 per cent alongside Healthcare and Technology.
Financial stocks were the best performers on the benchmark led by key heavyweights like HDFC, ICICI Bank, HDFC Bank, SBI, Axis Bank and IDFC.
Other major gainers included ITC, Reliance, L&T, Tata Motors, M&M, Ultratech, Power Grid Corp, Maruti, TCS, ZEE, Bajaj Auto, DLF, Grasim, Hero Moto, Indusind Bank, Ambuja Cement, Wipro, PNB and Infosys.

Turnover in the cash segment shot up to Rs 21,367.28 crore from Rs 16,478.59 crore yesterday. A total of 10,784.81 lakh shares changed hands in 81,91,512 trades and the market capitalisation at NSE stood at Rs 98,04,255 crore.