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India's Nifty Rises above 21,000 after Cenbank Rate Pause

BENGALURU, Dec 8 (Reuters) - Indian shares advanced on Friday, with the benchmark indexes Nifty 50 and Sensex hitting fresh record highs, after the Reserve Bank of India (RBI) stood pat on key rates for a fifth consecutive time and raised its growth forecast for fiscal 2023-2024.

The NSE Nifty 50 index added 0.42% to 20,988.35 points, while the S&P BSE Sensex was up 0.43% to 69,820.87 as of 10:50 a.m. IST.

The Nifty rose above 21,000 for the first time ever after the RBI maintained its key repo rate at 6.50%, amid robust economic growth and expectations of a rise in food prices in the coming months.

The Nifty has gained 3.5% so far this week, and is on course to log its longest weekly winning streak in three years.

Monetary policy will remain actively disinflationary, RBI Governor Shaktikanta Das said, adding that the fundamentals of Indian economy remain strong.

The central bank raised its growth forecast for the ongoing fiscal to 7% from 6.5% earlier and maintained the inflation expectation at 5.4%.

Rate-sensitive sectors like banks, financial services, public sector banks, private banks rose between 0.3% and 0.8% while realty gained 1.2%.

"We expect the momentum in housing sales to continue in the wake of the unchanged repo rates coupled with the resultant stable home loan rates and positive economic outlook on India," Anuj Puri, chairman of ANAROCK group, said.

The more-domestic focussed mid- and small-caps gained about 0.4% each to fresh record highs.

LIC Housing Finance climbed 3.6% to a record high, after Kotak Institutional Equities raised its price target citing favourable valuations and scope for re-rating.

Olectra Greentech gained 3% after bagging a $7.5-million order for supply of 40 electric buses.

Reporting by Bharath Rajeswaran in Bengaluru; Editing by Nivedita Bhattacharjee, Dhanya Ann Thoppil and Mrigank Dhaniwala

Source: Reuters

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