Shares of rate sensitive sectors such as automobiles and realty are trading higher on the bourses ahead of the Reserve Bank of India’s (RBI) quarterly policy review meeting on Tuesday.
The Bombay Stock Exchange (BSE), realty and auto sector index are up by nearly 1%, compared to marginal 0.03% rise in benchmark Sensex at 1010 hours.
DLF, Unitech, Indiabulls Real Estate and Sobha Developers from realty and Maruti Suzuki India,Hero MotoCorp, Tata Motors and Mahindra and Mahindra from auto are up 1-3%.
“The RBI is likely to reduce the short-lending (repo) rate by 25 basis points (0.25%) in the upcoming policy review on the back of recent decline in wholesale price-based inflation,” according to rating agency ICRA.
In ICRA’s view, the likelihood of a cut in the cash reserve ratio (CRR) in the Third Quarter Review of Monetary Policy is low.