The reverse repo rate now stands at 4 per cent, down 90 bps. Repo rate is the rate at which a country’s central bank lends money to commercial banks, and reverse repo rate is the rate at which it borrows from them.
Although, the RBI Governor Shaktikanta Das also said the economic growth and inflation projection would be highly contingent depending on the duration, spread and intensity of the pandemic.
At 11:05 am, Nifty Auto index, the top loser among sectoral indices, was down 1.9 per cent at 4,966 points, as compared to 0.75 per cent decline in the Nifty50 index. The auto index rallied 4.4 per cent to 5,285 in early morning trade. It fell nearly 6 per cent to hit an intra-day low of 4,956 on the NSE.
In the past three days, Nifty Auto index has gained 9 per cent from its 52-week low of 4,627, against 13.6 per cent rise in the Nifty50 index.
Among individual stocks, Bharat Forge was trading 8 per cent lower at Rs 262 after slipping 12 per cent from its intra-day high of Rs 298 on the NSE. Hero MotoCorp and Bajaj Auto were down 5 per cent each in intra-day trade. Maruti Suzuki India, Apollo Tyres, Mahindra & Mahindra, and MRF from the index were down in the range of 1 per cent to 3 per cent.
Auto industry was expected to recover from 2HFY21 after clearing the last hurdle of BS6 transition. However, the breakout of coronavirus in India has come as an additional challenge for the already battered auto industry. As a result, we have seen a sharp correction in the auto/auto component stock prices, Motilal Oswal Securities said in auto sector report.
Valuations appear attractive, but given the uncertain macro environment and the threat of possible prolonged impact of coronavirus, we prefer stocks offering higher visibility of demand recovery, better competitive positioning, scope of higher operating leverage and strong balance sheet, the brokerage said.