Shares of rate sensitive sectors mainly real estate and banking are continue under pressure second day in row in a surprise move, on Friday, the Reserve Bank of India (RBI) hiked the repo rate 25bp to 7.50% from 7.25%.
ICICI Bank, SBI, Axis Bank and HDFC Bank from banking sector, Godrej Properties, HDIL and DLF from real estate are trading lower by 1-3% on the BSE.
The RBI has signaled its vigilant stance on inflation through this hike in policy rate and also its stance on the improving external situation through partial easing of the short-end rates.
For the real estate sector, the rise in interest rates will increase the cost of capital for the developer and for the buyer, making it a double burden on the end user as the developer also has to pass on the cost to the end user.
Though stocks are trading near their historic low valuations, there is no positive catalyst which would warrant a change in our current medium term cautious stance on the banking sector, says analyst at Angel Broking in a note.
ICICI Bank, SBI, Axis Bank and HDFC Bank from banking sector, Godrej Properties, HDIL and DLF from real estate are trading lower by 1-3% on the BSE.
The RBI has signaled its vigilant stance on inflation through this hike in policy rate and also its stance on the improving external situation through partial easing of the short-end rates.
For the real estate sector, the rise in interest rates will increase the cost of capital for the developer and for the buyer, making it a double burden on the end user as the developer also has to pass on the cost to the end user.
Though stocks are trading near their historic low valuations, there is no positive catalyst which would warrant a change in our current medium term cautious stance on the banking sector, says analyst at Angel Broking in a note.
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