After seven consecutive sessions of losses, common domestic shares saw a rally of relief on Friday, helped by the Reserve Bank of India’s declaration to take necessary measures to protect the domestic economy from global shocks.

The move led to a 1,017-point rise in the Sensex and the benchmark index ended the session at 57,426.92. Its counterpart NSE Nifty moved past the important psychological level of 17,000 points and closed the day at 17,094.35, up 276 points.

The sharp rush in the market added Rs 3.73 lakh crore to investors’ wealth as it pushed the market capitalization of BSE listed stocks higher to over 271.88 lakh crore.

Here are the main factors behind the rise in the market:

  • RBI growth declaration

As expected, the Reserve Bank of India’s Monetary Policy Committee raised the repo rate by 50 basis points to 5.9% and also maintained its stance of remaining focused on withdrawing accommodation.

The Governor acknowledged the rising geopolitical tensions and their impact on growth as a result, but he also said that domestic conditions remain favorable, with an increase in credit.

  • Strength in rupee & bonds

Following the RBI’s decision and expectation, the rupee rose sharply against the dollar. The local currency was trading at 81.58 against the greenback compared to Thursday’s close of 81.86.

The central bank’s comments said it will take adequate measures to support growth even as inflation remains a focal point easing investors’ nerves. An appreciation of the rupee brings capital flows into equity.

Government bond prices also rose in anticipation of RBI’s policy action. The fact that the RBI was not too hawkish on inflation, although it pointed to downside risks due to global geopolitical tensions, improved sentiment.

European stocks rose, pointing to a possible recovery from a turbulent weekend in markets. European shares edged higher, extending their longest quarterly losses since 2009. US equity futures also gained after another brutal session on Wall Street that took the S&P 500 down 2% to its lowest level in nearly two years and sent the tech-heavy Nasdaq 100 down. tumbling nearly 4%, suggested data from Bloomberg.



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