BENGALURU, Sept 30 (Reuters) -
Indian shares rose on Friday, led by gains in banks and
energy stocks, as investors assessed comments of the country's
central bank after it hiked a key policy rate for the fourth
straight time, on expected lines, to bring down persistently
The NSE Nifty 50 index rose 0.9% to 16,964, as of
0519 GMT, and the S&P BSE Sensex gained 0.95% to
56,935. The indexes had taken a pause ahead of the policy
announcement as investors remained circumspect.
The Reserve Bank of India raised the key policy repo
rate by 50 basis pointsinline with economists expectationson
Friday and said it will stay focussed on withdrawal of monetary
The central bank's monetary policy committee (MPC) has hiked
the key policy rate by 190 bps since May to 5.9% to cool off
domestic retail inflation that has stayed sticky above the RBI's
tolerance limit of 6% since January.
"Going forward, the domestic policy may continue to be
driven by the global monetary tightening cycle and aggressive
stance of (U.S.) Federal Reserve reducing our degrees of
freedom," said Garima Kapoor, economist, institutional equities
at Elara Capital.
The rate sensitive Nifty bank index rose 1.9%,
while the financial index gained 1.6% and the energy
index added 1.4%.
Shares of Oil & Natural Gas Corp rose 3.4% and
was the top gainer in Nifty 50 index after the RBI said Indian
crude oil basket average was projected around $100 a barrel in
second half of the year
RBI, which has spent massive amounts of forex reserves
to arrest the currency's fall against the strong U.S. dollar,
said that the context of adequacy of foreign exchange reserves
is always kept in mind while intervening.
The RBI signalled that foreign exchange interventions
are likely to continue to defend any extreme volatility in the
rupee, said Sakshi Gupta, principal economist at HDFC Bank.
(Reporting by Rama Venkat and Nallur Sethuraman in Bengaluru;
Editing by Dhanya Ann Thoppil and Savio D'Souza)