Rate-sensitive sectors lead rise in stock market on RBI's repo rate pause

Indian shares advanced on Friday, led by gains in rate-sensitive sectors like auto, financials and realty, after the central bank kept key interest rates steady, as expected, and maintained its growth forecasts.

The NSE Nifty 50 index closed 0.55% higher at 19,653.50 points, while the S&P BSE Sensex rose 0.55% to 65,995.63. Both the benchmarks logged weekly gains, snapping a two-week losing streak.

The Reserve Bank of India kept the key lending rate steady at 6.50% and left its inflation and economic growth forecasts for fiscal 2024 unchanged. The Indian rupee was mostly unchanged, while bond yields jumped. [IN/] [INR/]

"The RBI's decision to maintain its inflation forecast has led to optimism in markets that inflation will come under control," said Gaurav Dua, head of capital market strategy at Sharekhan by BNP Paribas.

Twelve of the 13 major sectoral indexes advanced, with realty gaining 3.08%.

Auto stocks rose 0.47% and the heavyweight financials added 0.71%.

"The steady rate environment will help in keeping offerings competitive and affordable. The move will improve the sentiments," said Tribhuwan Adhikari, CEO of LIC Housing Finance.

Bajaj Finance rose 4.05% on non-bank lender's plans to raise funds. Its top shareholder Bajaj Finserv climbed 5.97%, topping the Nifty 50 gainers, as it would receive convertible warrants from Bajaj Finance as part of the fundraising plan.

Kalyan Jewellers jumped 10.13% after the company reported consolidated revenue growth of 27% for the July-September quarter.

Pharmaceutical firm Valiant Laboratories listed at a 16% premium to its issue price in its trading debut.

Investors' focus will shift to the U.S. jobs report, due after the Indian market closes, for cues into the Federal Reserve's rate trajectory.