Rate sensitive shares trade mixed as RBI keeps repo rate unchanged at 6.5%

Shares of rate sensitive sectors were trading mixed, but were outperforming the market, after the Reserve Bank of India's Monetary Policy Committee (MPC) decided to keep the benchmark repo rate unchanged at 6.5 per cent for the ninth consecutive time on Thursday.

At 11:07 AM, the Nifty Bank, Nifty Auto, Nifty Realty, and Nifty Financial indices were trading less than 0.30 per cent lower each, as compared to a 0.50-per cent decline in the Nifty 50 index.

Individually, Prestige Estates Projects, Sunteck Realty, Tata Motors, Federal Bank, and HDFC Bank were up in the range of 1 per cent to 2 per cent. However, TVS Motor Company, Bosch, Apollo Tyres, Bajaj Auto, Maruti Suzuki India, Sobha, Godrej Properties, ICICI Bank, and Punjab National Bank were down between 1 per cent and 3 per cent.

"Assuming a normal monsoon, consumer price index (CPI) inflation for 2024-25 is projected at 4.5 per cent with Q2FY25 CPI inflation seen at 4.4 per cent; Q3FY25 at 4.7 per cent; and Q4FY25 at 4.3 per cent. CPI inflation for Q1FY26 is projected at 4.4 per cent. The risks are evenly balanced,: the RBI said in its Monetary Policy Statement said.

The MPC expects domestic growth to hold up on the back of strength in investment demand, steady urban consumption, and rising rural consumption. Risks from volatile and elevated food prices remain high, which may adversely impact inflation expectations and result in spillovers to core inflation. There are also indications of core inflation bottoming out.

"The status quo in policy rates and stance were on expected lines. The Governor emphasised the need for vigilance on the inflation front saying “price stability is necessary for sustained growth,” said V K Vijayakumar, chief investment strategist, Geojit Financial Services.

There is nothing in the policy that will influence the market much. The market will be focused on the US jobs data today and the market's response to it and the recession fears in the US, he added.

The recent RBI policy announcement was largely uneventful, with the central bank keeping policy rates unchanged and continuing the withdrawal of accommodation as expected. The focus remains on tackling inflation, with no concerns about growth, and there are no indications of rate cuts in the near term. Consequently, the market will now turn its attention back to global cues, said Santosh Meena, head of research, Swastika Investmart.