Repo rate is the rate at which the central bank lends money to the commercial banks, in case of any shortfall of funds.
At 1:20 PM, Nifty Auto, Nifty PSU Bank and Nifty Realty index were trading with losses in the range of 0.13 per cent to 1 per cent, as compared to the benchmark index Nifty 50 index which remained unchanged. However, Nifty Private Bank and Nifty Bank indexes were up 0.67 per cent and 0.37 per cent, respectively.
ICICI Bank, IndusInd Bank, Federal Bank and HDFC Bank from banking space were trading higher by up to 3 per cent, while Punjab National Bank, Bank of Baroda and State Bank of India (SBI) were down in the range of 1 to 3 per cent on the National Stock Exchange (NSE).
DLF, Prestige Estates and Godrej Properties from the realty and Hero MotoCorp, MRF and Bajaj Auto from automobiles were trading in the green, while Mahindra & Mahindra, Tata Motors and Bosch hit their respective 52-week lows on the NSE.
The six-member committee lowered the FY20 GDP (gross domestic product) growth forecast to 6.9 per cent from 7 per cent, earlier. The central bank maintained its accommodative stance.
"Real GDP growth for 2019-20 is revised downwards from 7 per cent in the June policy to 6.9 per cent – in the range of 5.8-6.6 per cent for H1:2019-20 and 7.3-7.5 per cent for H2 – with risks somewhat tilted to the downside; GDP growth for Q1:2020-21 is projected at 7.4 per cent," the RBI said in a release.
“While we were hoping 50 bps rate cut, the RBI has chosen unconventional cut of 35bps which is mildly positive for the market. However, RBI cutting its estimation of GDP growth rate below 7 per cent, while widely expected, may not go down well with the market in short term,” said Rajiv Singh, CEO, Karvy Stock Broking.
Certain other macro prudential measures like enhancement of credit limit to individual non-banking finance company (NBFC) to 20 per cent from 15 per cent of a Bank's Tier I capital is good, he said.