Sensex falls 216 pts, Nifty below 18,600 on RBI's moderately hawkish policy

CLOSING BELL: The central bank increased repo rate by 35 basis points and lowered GDP growth forecast for FY23 to 6.8 per cent as it remained cautious of a sticky core inflation amid global turmoil

1:37 PM

RBI POLICY VIEW: RBI will likely pause after Budget 2023

RBI has reduced its FY23 growth forecasts to 6.8% (from 7%) while maintaining its inflation expectations at 6.7% for the year. In their outlook statement, RBI clearly notes that while growth impulses are resilient, it is the inflation which requires a watch. However, RBI’s inflation estimates for FY24 (Q1 & Q2) are 5% and 5.4% respectively.

With the message that the first focus of the MPC is to bring down inflation below 6% and then towards a medium-term goal of 4%, the guidance seems that RBI is now comfortable with the inflation trajectory and growth also needs attention. Furthermore, RBI also notes that liquidity could head towards more tightness with the statement of “market participants should wean from surplus liquidity” reaffirming the view. 

Overall, policy has a dovish tilt and with the next policy after the budget, RBI will likely pause before ensuring that transmission of current policy rates is complete.

Views by: Anitha Rangan, Economist, Equirus

1:32 PM

Market Check:: Select PSU Bank stocks log strong gains

1:22 PM

RBI Policy View: NIMs likely to remain intact owing to increasing share in floating rate loans

"As expected, RBI has increased repo by 35bps to 6.25%. The banks may witness uptick in yields as loan repricing will be sooner than repricing of deposits. Moreover, increasing share in Floating rate loans is likely to keep the NIMs intact."

 

- Ajit Kabi, Banking analyst at LKP Securities.

1:15 PM

RBI introduces single-block-and-multiple debits functionality in UPI

The Reserve Bank of India (RBI) on Wednesday announced introducing a single-block-and-multiple debits functionality in Unified Payments Interface (UPI). Customers can enable a payment mandate for a merchant by earmarking funds in their bank accounts for debits whenever required. READ MORE

1:07 PM

BSE 500:: Hikal, Siemens, UCO Bank among top gainers

Hikal up nearly 8 per cent was the top gainer among the BSE 500 stocks so far on Tuesday. It was followed by Central Bank, Siemens, UCO Bank and Jindal Stainless Hisar, up 5 - 7 per cent each.

12:59 PM

MPC ups inflation projection for Q3 and Q4, keeps it at 6.7% for full FY23

After writing to the government over its failure to contain the retail price inflation up to six per cent for three consecutive quarters, the Monetary Policy Committee (MPC) on Wednesday retained its projections for the rate of price rise at 6.7 per cent for the current financial year. However, it raised it slightly by 10 basis points (bps) for the third and fourth quarters each. READ MORE

12:54 PM

RBI Policy Reaction:: Expect another rate hike of 25 bps

“RBI raised the repo rate by 35 bps, with the rate now standing at 6.25%. The quantum of the rate hike was on expected lines. However, the tone of the meeting was slightly hawkish than what the markets were expecting. The governor emphasized on containing second-round effects of inflation and inflation expectations. We expect another 25 bps rate hike in the next MPC meeting, provided no upside risks to global inflation materialize.”

 

- Ritika Chhabra, Economist and Quant Analyst, Prabhudas Lilladher Pvt Ltd

 

12:50 PM

Time to be selective in rate sensitives; keep SBI, DLF on radar

Among individual stocks, Larsen & Toubro can rally to Rs 2,500 indicates chart, while SBI needs to conquer the hurdle at Rs 620. READ MORE

12:45 PM

RBI Presser LIVE: Core prices in services also rising now

>> Pass through of input costs, and exchange rate leading to sticky core inflation, says Patra
>> Core prices of services also rising now, earlier it was only in goods 

12:39 PM

RBI Presser LIVE: No more 50 bps hikes if inflation trajectory pans out as expected, says Michael Patra

>> If things pan out as we expect, 50 bps hikes will be over but we cannot take foot off the paddle, says Deputy Guv Patra

12:37 PM

RBI Presser LIVE: Looking at tech solutions for anonymity in digital transactions

12:32 PM

RBI Presser LIVE: A bank's intermediation needed in UPI transaction, not in CBDC

>> UPI transaction needs intermediation of a bank
>> In CBDC, users will withdraw currency and keep in their wallet to transfer to seller's wallet without any intermediation of a bank

12:24 PM

RBI Presser LIVE: India not entirely decoupled from the world, says RBI Guv

>> India can have spillovers from global economy.

12:22 PM

RBI Presser LIVE: Core inflation has been sticky in last 6 mths; needs to be tackled

12:09 PM

RBI Presser LIVE: India stands apart in a world of slowing growth amid recession fears