Interest rate-sensitive auto, realty, bank stocks rally

New Delhi, Jun 7 (PTI) Interest rate-sensitive auto, realty and bank stocks on Friday ended with gains on a day when the Reserve Bank of India left its key interest rate unchanged as expected, keeping the focus on inflation amid robust economic growth.

Among auto firms, Mahindra & Mahindra jumped 5.83 per cent, Tata Motors climbed 3.44 per cent, Apollo Tyres (2.97 per cent), Ashok Leyland (2.46 per cent), Maruti (0.94 per cent), MRF (0.93 per cent), Hero MotoCorp (0.65 per cent), Bajaj Auto (0.20 per cent) and TVS Motor (0.04 per cent) on the BSE.

The BSE auto index rallied 2.53 per cent to 56,623.88.

Realty stocks were also in demand, with Sobha soaring 6.45 per cent, Brigade Enterprises jumping 4.96 per cent, Macrotech Developers (3.51 per cent), Mahindra Lifespace (3.07 per cent), Godrej Properties (2.84 per cent), DLF (1.80 per cent) and Phoenix Mills (0.88 per cent).

The realty index jumped 1.89 per cent to 8,363.16.

From the bank space, State Bank of India climbed 1.59 per cent, Axis Bank (1.29 per cent), AU Small Finance Bank (1.24 per cent), Kotak Mahindra Bank (1.04 per cent), ICICI Bank (1.01 per cent), HDFC Bank (0.88 per cent), IndusInd Bank (0.83 per cent), Bank of Baroda (0.73 per cent), IDFC First Bank (0.52 per cent) and Federal Bank (0.36 per cent).

The BSE Bankex index climbed 1.09 per cent to 56,766.69.

The 30-share BSE Sensex jumped 1,720.8 points or 2.29 per cent to hit a record peak of 76,795.31 in day trade. The benchmark ended at 76,693.36, up 1,618.85 points or 2.16 per cent.

"The anticipation of stability within the coalition government at the Centre, coupled with the RBI's upward revision of its growth forecast for FY25 to 7.2 per cent, fuelled a broad-based rally in the domestic market. The Indian market surpassed its previous record high set on exit-poll day and reached a fresh peak," Vinod Nair, Head of Research, Geojit Financial Services, said.

The Reserve Bank of India (RBI) left its key interest rate unchanged on Friday as expected, keeping the focus on inflation amid robust economic growth that is likely to provide the new Modi government headroom for manoeuvring reforms.

The Monetary Policy Committee, consisting of three RBI and an equal number of external members, kept the repo rate unchanged at 6.50 per cent for an eighth straight policy meeting and stuck to its relatively hawkish stance of "withdrawal of accommodation".

With the Indian economy, Asia's third-largest, growing faster than expected in the previous year, the RBI raised its GDP growth projection for the current fiscal through March 2025 to 7.2 per cent from 7 per cent while maintaining its inflation forecast at 4.5 per cent.

"Growth momentum in the economy has given liberty to RBI to keep interest rate unchanged. The growth, inflation and interest rates are currently well balanced inter-se for status quo to continue in the interest rate.

"Overall, growth momentum to continue in the economy and so will the stock market undertone," said Umeshkumar Mehta, CIO, SAMCO Mutual Fund.