 "Rate sensitive shares in limelight ahead of RBI policy review on Monday")
Shares of rate sensitive sectors such as realty, infrastructure, banking and automobiles are trading higher ahead of the Reserve Bank of India (RBI) mid-quarter policy review on June 17.
Indiabulls Real Estate, Oberoi Realty and Sobha Developers from realty, Yes Bank, Punjab National Bank and ICICI Bank from banking and Tata Motors, Maruti Suzuki India, Bajaj Auto and Mahindra and Mahindra from automobiles are trading higher by over 3% each on the Bombay Stock Exchange (BSE).
The BSE, auto and realty index are up 3% each, while banking index Bankex is up 2% compared to 1.9% rise in benchmark index Sensex at 1500 hours.
RBI is likely to go for 0.25% cut in cash reserve ratio (CRR) instead of interest rates next week as this move is likely to balance growth and rupee concerns,” Bank of America Merrill Lynch says in a note.
"We have replaced our 25 bps (basis points) RBI rate cut call, on Monday, with a 25 bps (0.25%) CRR cut," BofA Ml said in a research note, adding that "we retain our 25 bps (0.25%) RBI rate cut on July 30".
In the last policy announcement on May 3, the central bank had cut its key rate of lending the repo rate by 0.25%.
According to the research note, CRR cut is likely to transmit RBI rate cuts to lending rates. Lending rates in India are still ruling at their 2008 peak.
Indiabulls Real Estate, Oberoi Realty and Sobha Developers from realty, Yes Bank, Punjab National Bank and ICICI Bank from banking and Tata Motors, Maruti Suzuki India, Bajaj Auto and Mahindra and Mahindra from automobiles are trading higher by over 3% each on the Bombay Stock Exchange (BSE).
The BSE, auto and realty index are up 3% each, while banking index Bankex is up 2% compared to 1.9% rise in benchmark index Sensex at 1500 hours.
RBI is likely to go for 0.25% cut in cash reserve ratio (CRR) instead of interest rates next week as this move is likely to balance growth and rupee concerns,” Bank of America Merrill Lynch says in a note.
"We have replaced our 25 bps (basis points) RBI rate cut call, on Monday, with a 25 bps (0.25%) CRR cut," BofA Ml said in a research note, adding that "we retain our 25 bps (0.25%) RBI rate cut on July 30".
In the last policy announcement on May 3, the central bank had cut its key rate of lending the repo rate by 0.25%.
According to the research note, CRR cut is likely to transmit RBI rate cuts to lending rates. Lending rates in India are still ruling at their 2008 peak.
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