Sensex Trades 370 Points Up; Hero MotoCorp & Tata Motors Gain Over 5%

Stock markets in India are presently trading higher following the outcome of assembly polls announced on Tuesday. That apart, the appointment of Shaktikanta Das as new Reserve Bank of India's (RBI) governor impacted the market sentiment.

Among the sectoral indices, automobiles stocks and realty stocks are witnessing buying interest. While, consumer durables stocks and healthcare stocks are trading in red.

The BSE Sensex is trading higher by 378 points and the NSE Nifty is trading higher by 117 points. Meanwhile, the BSE Mid Cap index and the BSE Small Cap index both are trading up by 2% & 1.8% respectively. The rupee is trading at 72.05 to the US$.

Shares of banking and nonbanking financial companies (NBFCs) are witnessing a sharp rally today on expectations that the new Reserve Bank of India (RBI) governor would announce steps to ease liquidity.

Note that the shares of several lenders have been battered in the recent past amid worries that shrinking liquidity will hurt their earnings.

Further, Shaktikanta Das, a former economic affairs secretary, was appointed the new governor of the central bank on Tuesday.

This came on the back of Reserve Bank of India (RBI) governor Urjit Patel resignation on Monday.

Patel, whose three-year term was to end in September 2019, is the first governor since 1990 to step down before his term ended.

Patel cited personal reasons for his resignation, but as per the reports, there were undercurrent since the government cited hereto never-used-before provisions of the law to bring him to negotiating table on issues it felt were of national interest.

Speaking of a tiff between the government and the RBI here's an excerpt of what Vivek Kaul, the editor of Vivek Kaul Publishing wrote in his article titled RBI-FinMin Bhai Bhai is Always a Bad Idea:

  • "The comment has been made in light of the Reserve Bank of India (RBI) not going all out to defend the value of the rupee against the dollar. The trouble, as I have explained on multiple occasions before is, a central bank getting obsessed with holding the value of its currency against the dollar, is inevitably a bad idea.

    If that means that the RBI does not do what the finance ministry wants it to, then it is basically doing the right thing, the lack of coordination notwithstanding. If central bankers always did what politicians and bureaucrats wanted it to do, the world would have been a much worse place by now."
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