Indian Shares Surge As RBI Cuts Repo Rate, Boosts Liquidity

(RTTNews) - Indian shares rose notably on Friday after the Reserve Bank of India lowered the repo rate by 25 basis points to 5.25 percent, consistent with its focus on growth.

Additionally, the RBI said it would conduct OMO purchases of government securities of INR 1 trillion and a 3-year USD/INR Buy Sell swap of US$ 5 billion this month to inject durable liquidity into the system.

The rate cut alongside long dated Swaps and OMOs will help boost liquidity and keep the currency in relative balance, analysts said.

RBI Governor Sanjay Malhotra characterized India's current macroeconomic moment as a "rare goldilocks period", that marks high economic growth and exceptionally low inflation.

The benchmark BSE Sensex surged 447.05 points, or 0.52 percent, to 85,712.37, after having snapped its four-day losing streak the previous day.

The broader NSE Nifty index jumped 152.70 points, or 0.59 percent, to 26,186.45. The BSE mid-cap index added 0.2 percent while the small-cap index fell 0.7 percent.

The market breadth was weak on the BSE, with 2,326 shares falling while 1,816 shares advanced and 186 shares closed unchanged.

Rate-sensitive banks and financials topped the gainers list, with Bajaj Finance, Bajaj FinServ and SBI all climbing around 2 percent.

Globally, Asian markets ended mixed after three days of gains. European stocks traded higher for a fourth consecutive session after data showed Germany's factory orders grew more than expected in October on robust domestic demand.

A softer dollar helped lift gold prices, heading into next week's FOMC meeting. Oil prices held steady but were poised for a second consecutive weekly gain, driven by escalating U.S.-Venezuela tensions and stalled Ukraine peace talks.