Indian shares inch up ahead of central bank rate decision

Topics RBI Policy | RBI repo rate | RBI

BENGALURU (Reuters) - Indian shares inched higher on Wednesday, ahead of a central bank decision that could leave interest rates at record lows, as a second surge in domestic coronavirus cases sparked fears about the impact on economic growth.

The Reserve Bank of India (RBI), which has slashed its main repo rate by 115 basis points since March 2020 to cushion the impact of the COVID-19 pandemic, was expected to keep its benchmark lending rate at 4%.

Economists had expected the RBI to start normalising policy or unwind the large scale rupee liquidity in the banking system in the June quarter or latest by September quarter. That is now expected to be delayed, according to analysts.

"The Monetary Policy Committee is likely to maintain that growth needs consistent firm traction and continued policy support is crucial for a durable growth revival," Emkay Global Financial Services said in a preview note.

The NSE Nifty 50 index rose 0.2% to 14,709 and the S&P BSE Sensex was up 0.1% at 49,256.10 by 0347 GMT.

Investors will be keeping an eye on the central bank's liquidity stance to support the economy in relation to rising COVID-19 cases and inflation forecasts amid a rise in global commodity prices, especially crude oil.

Earlier this week, India breached the grim milestone of 100,000 daily coronavirus infections for the first time.

Restaurant chain operator Barbeque-Nation Hospitality Ltd's shares will make their debut in the Mumbai market on Wednesday.

The International Monetary Fund said on Tuesday unprecedented public spending to fight the pandemic would push global growth to 6% this year, while projecting India's growth rate at 12.5% for 2021.


(Reporting by Nallur Sethuraman in Bengaluru; Editing by Shounak Dasgupta)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel