Rate-sensitive stocks were trading firm after Reserve Bank of India’s Monetary Policy Committee (MPC) on August 6 left key interest rates unchanged at a record low.
The repo rate remains at 4 percent and the reverse repo rate at 3.35 percent. RBI Governor Shaktikanta Das said the policy stance continues to be “accommodative”.
The auto, bank indices up 0.5 percent each, while realty index trading with marginal gains.
The auto index was up 0.6 percent led by the Amara Raja Batteries, Tata Motors, Maruti Suzuki and Eicher Motors.
Among the banking names, IndusInd Bank, IDFC First Bank, PNB and AU Small Finance Bank were up 1-3 percent.
The BSE realty index was marginally up supported by the Indiabulls Real Estate, Prestige Estates Projects and Mahindra Lifespace Developers, while Oberoi Realty, Sobha and Brigade Enterprises were under pressure.
The monetary policy committee (MPC) meeting began on August 4. While most analysts reckon the RBI won’t raise interest rates till next year, some expected the central bank to offer some clues to when it will start reducing liquidity in its commentary.
Also read: RBI monetary policy announcement today at 10 am: Will MPC revise interest rates, inflation target?
The monetary policy is unlikely to change repo and reverse repo rates amid fears of the third Covid-19 wave, said Heena Naik, Research Analyst-Currency, Angel Broking.
“The inflation outlook for FY22 could also see a revision from the predicted levels of 5.1 percent. The RBI is likely to watch the developing macroeconomic situation for some more time before taking any decisive action on monetary policy,” Naik said.
The fear of a third wave would also force the RBI to continue with the growth supporting measures. Inflation rates, liquidity concerns, and Governor Shakitkanta Das’ commentary will more in focus, she added.
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