Rate sensitive shares gain up to 3% as RBI keeps repo rate unchanged

SBI, Indian Bank, UCO Bank, Bank of Maharashtra, Punjab & Sind Bank, Canara Bank and Punjab National Bank from the PSU banks were up in the range of 1 - 3 per cent.

Shares of rate sensitive sectors such as financials including banks, non-banking financial companies (NBFCs) and housing finance companies (HFC), real estate and automobiles were trading firm after the Reserve Bank of India (RBI) on Thursday kept the repo rate unchanged at 6.5 per cent.

While announcing the decision, RBI governor Shaktikanta Das said that the monetary policy committee (MPC) voted unanimously to keep the rate unchanged. Das said that the decision is for "this meeting only". Das said that the MPC voted 5-1 to remain focussed on "withdrawal of accommodation".

At 10:15 AM; Nifty Bank, Nifty Financial Services, Nifty PSU Bank, Nifty Private Bank and Nifty Realty indices were quoting higher by up to 1.3 per cent. In comparison, the Nifty 50 was up 0.2 per cent at 17,596.

State Bank of India (SBI), Indian Bank, UCO Bank, Bank of Maharashtra, Punjab & Sind Bank, Canara Bank and Punjab National Bank from the PSU banks were up in the range of 1 per cent to 3 per cent on the National Stock Exchange (NSE) in Thursday’s intra-day trade.

DLF and Godrej Properties from realty, Ashok Leyland and Eicher Motors from automobiles, and Bajaj Finance and Shriram Finance from the financials were up between 1 per cent and 3 per cent.

This move would provide a further boost for the affordable and mid-income housing segments, in particular. Coupled with the Central Government also hiking its outlay for the PMAY program during this year’s Budget, the Confederation of Real Estate Developers' Association of India (CREDAI) expect the demand for affordable housing to grow in the upcoming quarters.

In FY23, the RBI cumulatively hiked the repo rate by 250 bps from 4 per cent to 6.5 per cent., levels witnessed in Jan 2019. From a housing market perspective, despite a sharp rise in repo rate which has immediately transmitted into lending rates, the housing demand has continued to sustain thus far.