Rate sensitive shares mixed after RBI maintains status quo on repo rate

Shares of rate sensitive sectors were trading mixed with banks largely lower after the Reserve Bank of India (RBI) maintained 'status quo' on interest rates during the bi-monthly monetary policy decision. While, automobiles, real estate, select non-banking financial companies (NBFCs) and housing finance companies stocks were trading up to 1 per cent higher, the benchmark Nifty50 index was down 0.06 per cent at 10:38 am.

The Reserve Bank of India's six-member monetary policy committee, headed by governor Shaktikanta Das, on Friday kept the benchmark interest rate unchanged amid coronavirus uncertainty and fears over inflation. The repo rate (lending rate) will continue at 4.00 per cent and reverse repo rate (RBI’s borrowing rate) at 3.35 per cent. With this, the repo rate has remained unchanged for the sixth consecutive time.

Among individual stocks, Hero MotoCorp, MRF and Mahindra & Mahindra from the automobile pack; and Phoenix Mills, Brigade Enterprises, Godrej Properties, Sunteck Realty and Prestige Estates from the real estate sector were up in the range of 1 per cent to 2 per cent.

However, bank stocks such as HDFC Bank, State Bank of India (SBI), RBL Bank, Bandhan Bank and Punjab National Bank slipped nearly 1 per cent each. Power Finance Corporation, REC, Housing Development Finance Corporation (HDFC) and Bajaj Finance, on the other hand, were trading in the green.

Denting the sentiment could be the RBI's downward revision to FY22's real GDP growth projection to 9.5 per cent from 10.5 per cent estimated earlier. "Unlike the first wave of Covid-19, where economy came to a standstill, economic impact during the second wave will be contained," the RBI Governor said. CPI inflation has been projected at 5.1 per cent in FY22 — 5.2 per cent in Q1, 5.4 per cent in Q2, 4.7 per cent in Q3 and 5.3 per cent in Q4.