MARKET WRAP: Sensex slips 71 pts as RBI holds repo rate; financials decline

All that happened in the markets today

12:21 PM

EXPERT COMMENT | Jimeet Modi, Founder & CEO, SAMCO Securities on RBI policy decision

RBI has finally thrown the ball back in Government’s court to revive the economic engine which has further deteriorated since the last meet. Transmission of interest rates have not happened yet which could be one of the reasons RBI waited to cut rates and nudged the Government and banks to take efforts from their end. Additionally, slightly higher inflationary tendencies might have also led to the pause in rate cut. But, this is a negative for the markets as a rate cut was required to boost risk taking appetite in the economy. 

12:20 PM

NEWS ALERT | Can't rule out fall in direct tax collection due to economic slowdown: RBI guv

12:19 PM

NEWS ALERT | There are signs that Capex cycle may be turning up: Shaktikanta Das

12:18 PM

NEWS ALERT | To set-up cyber-security measures for urban cooperative banks: RBI Governor Shaktikana Das

12:11 PM

NEWS ALERT | Union Budget to provide insights into govt's further actions on economy: RBI governor Shaktikanta Das

12:10 PM

NEWS ALERT | Business sentiment pessimistic in Q3FY20: RBI

12:08 PM

NEWS ALERT | Credit market transmission remains delayed but is picking up: RBI

12:07 PM

NEWS ALERT | Monetary transmission has been full and reasonably swift: RBI

 -- Transmission swift across various money market segments and the private corporate bond market

-- As against the cumulative reduction in the policy repo rate by 135 bps during February-October 2019, transmission to various money and corporate debt market segments ranged from 137 bps (overnight call money market) to 218 bps (3-month CPs of non-banking finance companies).

-- Transmission to the government securities market, however, has been partial at 113 bps (5-year government securities) and 89 bps (10-year government securities). 

12:06 PM

NEWS ALERT | Overall liquidity in surplus in October and November 2019: RBI

-- This is despite an expansion of currency in circulation due to festival demand, notes RBI's MPC

12:05 PM

NEWS ALERT | Households expect inflation to rise: RBI MPC

Households’ inflation expectations, measured by the Reserve Bank’s November 2019 round of the survey, increased by 120 basis points over the 3-month ahead horizon and 180 basis points over the 1-year ahead horizon as they adapted to the spike in food prices in recent months. 

Based on the Reserve Bank’s consumer confidence survey, spending on non-essential items of consumption has shrunk compared to a year ago; however,

consumers expect their overall spending to remain unchanged going forward largely due to an increase in prices.

12:03 PM

RBI on GDP growth

Real GDP growth for 2019-20 in the October policy was projected at 6.1 per cent – 5.3 per cent in Q2:2019-20 and in the range of 6.6-7.2 per cent for H2:2019-20 – with risks evenly balanced; and 7.2 per cent for Q1:2020-21. GDP growth for Q2:2019-20 turned out to be significantly lower than projected

12:02 PM

Six factors that influenced RBI's inflation forecast

1) The upsurge in prices of vegetables is likely to continue in immediate months; however, a pick-up in arrivals from the late kharif season along with measures taken by the Government to augment supply through imports should help soften vegetables prices by early February 2020.

2) incipient price pressures seen in other food items such as milk, pulses, and sugar are likely to be sustained, with implications for the trajectory of food inflation.

3) Both the 3-month and 1-year ahead inflation expectations of households polled by the Reserve Bank have risen and these latent sentiment upsides are being reflected in other surveys as well.

4) Domestic financial markets have exhibited volatility.

5) Domestic demand has slowed down, which is being reflected in the softening of inflation excluding food and fuel.

6) crude oil prices are expected to remain range bound, barring any supply disruptions due to geo-political tensions

(Source: Policy release)

12:02 PM

NEWS ALERT | Oct to March inflation target raised to 4.7-5.1%

11:59 AM

All members vote in favour

All members of the MPC – Dr. Chetan Ghate, Dr. Pami Dua, Dr. Ravindra H. Dholakia, Dr. Michael Debabrata Patra, Shri Bibhu Prasad Kanungo and Shri Shaktikanta Das – voted in favour of the decision

11:57 AM

GDP growth projection