Sensex jumps 1,017 pts on RBI's 50-bps hike; Nifty nears 17,100; banks lead

CLOSING BELL: The benchmark indices snapped their seven-day losing streak as the RBI delivered a 50-basis point repo rate hike, and underscored the resilience of the Indian economy in his statement

12:06 PM

RBI Press Conference: Liquidity continues to be surplus, says Governor

>> Liquidity continues to be surplus
>> Amidst currency market turmoil, Indian Rupee see orderly depreciation
>> Prudent intervention and management of forex exchange reserves
>> Monetary policy will be watchful with evolving data

11:56 AM

RBI Policy view | Home loan rates to see uptick, impact affordability

The RBI stays committed to control inflation and bring it closer to the comfort level of 4% by continuing to increase the repo rate and tightening the liquidity condition.

Although, global crude and commodity prices have softened a bit, revival in domestic demand along with sharp rupee depreciation would continue to exert price pressures leaving no choice for the RBI but to raise REPO Rate by another 50 BPS. 
 

Tight liquidity conditions along with the repo rate hike would lead to a significant rise in the cost of funding, impacting home loan rates as well.

Going by the current trends we expect about 50% of this will be passed onto the home loan borrowers. A rise in home loan rates will further impact affordability across the markets.

As per Knight Frank, affordability index will deteriorate by another 2% . This might slowdown home buying decision for a short to medium term.

Views by Shishir Baijal, Chairman & Managing Director, Knight Frank India.

 

11:45 AM

Gujarat Flurochem hits new high on healthy outlook; zooms 109% in 1 year

Adoption of 5G-enabled smartphones in India is expected to triple and this, in turn, will drive the fluoropolymers market and benefit the Gujarat Fluorochemicals. Read here

11:39 AM

RBI MPC Policy: Browbeaten by the West

Clearly, the fast-evolving world order and consistent repricing of Fed’s outsized hikes are strong-arming the EMs. 

 

This painful adjustment has not spared the RBI either, which realised the net cost of a supposed soft signalling via shallow hike could be higher than a larger hike of 50 bps. 

 

This exposes the instability inherent with the classic EM central bank trilemma: one cannot have a stable currency, unfettered capital flows, and independent monetary policy all at the same time.

 

This conscious front-loading could give them some breather next year on shallow hikes ahead. 
 

At this point, we still think that the RBI would not go too restrictive and terminal rate could hover near the estimated real rates, implying not more than 100 bps hikes ahead, including today’s decision. 

 

However, the extent of global disruption will remain key to the RBI’s reaction function ahead.

Views by Madhavi Arora, Lead Economist, Emkay Global Financial Services.

11:32 AM

COMMENT | RBI's 50 bps rate hike on expected lines

The outcome of the MPC meeting is on expected lines as RBI raised the repo rate by 50 bps.

The central bank gave a very balanced guidance emphasizing on continuing resilient domestic economic growth with risks being rising instability in the global economic and financial environment.

Overall the markets have reacted positively to the policy announcement.

Views by Ritika Chhabra- Economist and Quant Analyst, Prabhudas Lilladher

11:20 AM

US markets could head lower as earnings downgrades pick up pace: Chris Wood

Corporate earnings in the US, meanwhile, are likely to be under pressure amid recession fears. Analysts have already started cautioning investors as regards a drop in earnings. Read here

11:14 AM

Expert Comment :: 'Doing away with forward guidance is a clear indication of the hawkish stance'

The RBI MPC increase of repo rate of 50 basis points, comes as no surprise to the market as the same was widely expected. The governors mention of doing away with forward guidance is a clear indication of the hawkish stance that the RBI is going to be adopting for the next few cycles, with policy responses evolving in response to changes in the external environment. While the country fundamentals seem to be strong and there is hope that they will continue to be strong, headwinds from the global environment have a bearing on growth for which policy responses will be provided, even if they are unconventional is what we heard the governor say. The markets are going to see some interesting times.

 

Views by: Vivek iyer- Partner and leader , Financial services risk, Grant Thornton Bharat

11:09 AM

Rate sensitive shares bounce back after RBI hikes rate; Nifty Bank gains 1%

Kotak Mahindra Bank, HDFC Bank, Axis Bank, State Bank of India, HDFC, ICICI Bank, SBI Life Insurance and SBI Cards from the Nifty Financial index gained up to 2 per cent each. Read here

10:59 AM

Nifty PSB index leading gains among financials

10:58 AM

Bond Market :: Yields on 10-year G-Sec slips post RBI rate hike

10:53 AM

RBI policy: Repo rate hiked by 50bps to 5.9%; FY23 GDP forecast slashed

CPI inflation for the current financial year is seen at 6.7%, with the price gauge seen at 7.1% in July-September. Read in detail here

10:40 AM

RBI Policy LIVE: Das says 67% of decline in FX reserves in FY23 on rising $, US yields

>> In Q1FY23, net dollar accretion $4.6 billion

10:37 AM

Market Check:: S&P BSE Bankex rallied over a per cent, up nearly 500 points

10:35 AM

RBI Policy LIVE: To introduce a framework for securitisation of NPAs

>> To issue a paper for banks to make provisions on assessment of probable losses (NPAs)
>> To issue a framework for securitisation of stressed assets (NPAs)
>> Internet banking facility: To rationalise these facilites for Regional Rural Banks 
>> Online aggregator rules to be extended to offline payment aggregators now

10:31 AM

RBI Policy LIVE: RBI's forex market intervention remains judicious

>> RBI's market intervention remains judicious
>> India's external debt to GDP ratio remains lowest amongst EMs