Rate sensitive shares trade mixed after RBI keeps repo rate unchanged at 4%

At 10:40 am; barring the Nifty PSU index which gained nearly a per cent, most of the other sectoral indices such as Nifty Bank, Financial Services, Auto and Realty were more or less unmoved.

Shares of rate sensitive sectors such as financials including banks, non-banking finance companies (NBFCs), housing finance companies (HFCs) and micro-finance institutions (MFIs), real estate and automobiles traded on a mixed note after the six-member Monetary Policy Committee (MPC) kept the repo rate unchanged at 4 per cent. MPC committee also kept the reverse repo rate unchanged at 3.35 per cent.

The repo rate or the short-term lending rate was last cut on May 22, 2020. Since then, the rate remains at a historic low of 4 per cent.

At 10:40 am; the Nifty Bank and Nifty Financial Services indices were down 0.04 per cent, while Nifty Auto and Nifty Realty indices were up less than 0.1 per cent, while Nifty PSU Bank index was up almost 1 per cent. In comparison, the benchmark index Nifty50 was flat at 17,638.75.

Among individual stocks from financials sectors, State Bank of India (SBI), Axis Bank, Muthoot Finance, ICICI Bank and Bajaj Finserv gained up to 1 per cent, while HDFC and HDFC Bank were down 1 per cent on the National Stock Exchange (NSE) on Friday.

From the automobiles, TVS Motors, Ashok Leyland and Tata Motors were up 1 per cent to 2 per cent, while Eicher Motors, Mahindra & Mahindra (M&M) and Maruti Suzuki India traded in red. From real estates, Macrotech Developers, Prestige Estates Projects and Brigrade Enterprises were up over 1 per cent each and DLF, Oberoi Realty and Indiabulls Real Estate were down up to 3 per cent each.

The Reserve Bank of India (RBI) on Friday also raised its inflation outlook to reflect costlier oil while leaving borrowing costs unchanged after the three-day meeting of the MPC.

In its first monetary policy announcement of 2022-23, the RBI projected inflation to be at 5.7 per cent this financial year, compared to 4.5 per cent in 2021-22. RBI Governor Shaktikanta Das said in a statement on Friday after the meeting that the repo and reverse repo rates had been kept unchanged at 4 per cent and 3.35 per cent, respectively. The central bank revised its real GDP growth projection for 2022-23 to 7.2 per cent, compared to its earlier guidance of 7.8 per cent. CLICK HERE FOR FULL REPORT