The benchmark indices on Wednesday pared losses and ended on a strong note, closing at more than 1.5% amid reports of a rift between the Reserve Bank of India and the Centre. The surge came after the finance ministry said it acknowledged the RBI’s autonomy. The rupee closed at 73.95 against the dollar.
The BSE Sensex ended 551 points higher at 34,442, while the broader NSE Nifty 50 index settled at 10,387, up 188 points. The markets had turned volatile during the afternoon trade after reports suggested that the rift between the finance ministry and the RBI may have escalated. Reuters had earlier reported that the indices were on their way towards ending the month at their worst since February 2016.
Multiple business news outlets on Wednesday reported that the government has initiated talks with the central bank to consider invoking Section 7 of the Reserve Bank of India Act, which could empower it to issue directions to the central bank on certain matters. The speculation led to the rupee declining to 74.04 at one point, lower than Tuesday’s close by 37 paise and the lowest since October 15.
Among sectoral indices, information technology, finance, consumer durables and healthcare posted gains, while metal declined 1.4%.
The top gainers on the BSE Sensex were HDFC, IndusInd Bank, Infosys, Axis Bank and Yes Bank. The stocks of Coal India, Tata Steel, Maruti Suzuki, Adani Ports and Kotak Mahindra were the top losers on the Sensex.
Meanwhile, Tech Mahindra, Indiabulls Housing, UPL Ltd, HDFC and HCL Tech were the biggest performers on NSE Nifty 50. Coal India was the biggest loser on NSE Nifty as well, followed by Dr Reddy’s Labs, Tata Steel, Hindalco and Maruti Suzuki.