Market Wrap, January 28: RBI's helping hand lifts equities; SENSEX rises 535 pts, NIFTY50 ends at 22,957; market breadth in favour of declines

The banking and financial services counters rallied after the Reserve Bank of India (RBI) on Monday said it will purchase government securities worth ₹60,000 crore in three tranches and announced several other steps to inject liquidity into the banking system.

As part of measures to manage liquidity conditions, the central bank also announced a USD/INR buy/sell swap auction of $5 billion for a tenor of six months to be held on January 31, 2025.

To inject liquidity, RBI said open market operations (OMO) purchase auctions of Government of India securities for an aggregate amount of ₹60,000 crore in three tranches of ₹20,000 crore each will be held on January 30, February 13, and February 20.

At the close, the S&P BSE SENSEX stood at 75,901.41, up 535.24 points, or 0.71%, while the NSE's NIFTY50 index settled at 22,957.25, up 128.10 points, or 0.56%.

Commenting on the RBI's move, Murthy Nagarajan, Head of Fixed Income, Tata Asset Management, said that the Reserve Bank of India's proposed measures to ease banking system liquidity through open market operations (OMO) in three tranches and a variable rate repo (VRR) auction in February are positive steps. However, these may not be sufficient given the current liquidity deficit of ₹3 lakh crore.

"We expect additional measures from the central bank to ensure stability in liquidity. Specifically, we anticipate a 50 basis point cut in the Cash Reserve Ratio (CRR) in the February MPC policy," Nagarajan said.

A combination of liquidity enhancement, rate cuts, and growth-supporting measures in the upcoming budget will be crucial to driving economic growth, Nagarajan further said.

As many as 28 stocks on the NIFTY50 index rallied while 22 scrips ended in the red.

Market Statistics

As many as 4,084 stocks traded on the BSE on Tuesday. Out of this 2,666 declined and 1,308 advanced while 110 scrips remained unchanged.

A total of 60 stocks hit their 52-week high levels while 569 stocks hit their one-year lows.

Further, 12 stocks hit their upper circuit limits and 5 touched their lower circuit bands.

Sector Watch

Barring rate-sensitive stocks, all the sectoral indices ended in the red.

The BSE BANKEX index ended at 55,516.37, up 813.08 points, or 1.49%, while the BSE REALTY index settled at 6,684.18, up 83.89 points, or 1.27%.

Further, the BSE Financial Services index closed the session at 10,808.64, up 154.34 points, or 1.45% and the BSE AUTO index ended at 50,049.90, up 574.50 points, or 1.16%.

Broader Market

The BSE MidCap index ended at 41,318.66, down 252.94 points, or 0.61%. The BSE SmallCap index settled at 47,492.48, down 853.89 points, or 1.77%.