Shares of rate sensitive sectors mainly banking and realty moved higher on hopes that the Reserve Bank of India (RBI) may ease rates in its policy meet next week.
State Bank of India, ICICI Bank, HDFC Bank, Dena Bank, Canara Bank and Oriental Bank of Commerce from banking space and Unitech and Indiabulls Real Estate from realty was trading higher by more than 3% each on BSE.
The BSE banking sector index Bankex, was the largest gainer among sectoral indices, up 2.23%, while realty index gained around 2%, as compared to the 1.15% gain in benchmark Sensex, at 1500 hours.
“The government data released on Thursday gives the RBI room to ease monetary policy when it meets next week,” a Reuters report suggested quoting prime minister's economic adviser, C. Rangarajan.
“On a positive note, inflation in manufactured products has decelerated further and core inflation has receded to 3.8% reflecting the decline in commodity prices as well as weak pricing power. This should give the RBI some elbow room to ease rates in the March 19 policy as monetary policy stance has turned more growth-supportive,” said Ms. Bhupali Gursale, Economist- Angel Broking.
Economist expect a 25 bp cut in the repo rate by the RBI in the forthcoming policy review, but rate cuts going forward are likely to be limited by still-prevalent upside risks to inflation and the widening current account deficit, she added.
State Bank of India, ICICI Bank, HDFC Bank, Dena Bank, Canara Bank and Oriental Bank of Commerce from banking space and Unitech and Indiabulls Real Estate from realty was trading higher by more than 3% each on BSE.
The BSE banking sector index Bankex, was the largest gainer among sectoral indices, up 2.23%, while realty index gained around 2%, as compared to the 1.15% gain in benchmark Sensex, at 1500 hours.
“The government data released on Thursday gives the RBI room to ease monetary policy when it meets next week,” a Reuters report suggested quoting prime minister's economic adviser, C. Rangarajan.
“On a positive note, inflation in manufactured products has decelerated further and core inflation has receded to 3.8% reflecting the decline in commodity prices as well as weak pricing power. This should give the RBI some elbow room to ease rates in the March 19 policy as monetary policy stance has turned more growth-supportive,” said Ms. Bhupali Gursale, Economist- Angel Broking.
Economist expect a 25 bp cut in the repo rate by the RBI in the forthcoming policy review, but rate cuts going forward are likely to be limited by still-prevalent upside risks to inflation and the widening current account deficit, she added.