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
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12:08 PM
RBI Presser LIVE: Will inject liquidity if needed, says RBI Guv
12:06 PM
RBI Presser LIVE: Worst of inflation now behind us, but no room for complacency, says RBI Guv
11:55 AM
China's trade weakens to worst since first Covid lockdown as demand falls
The worsening trade performance is undermining a strong pillar of China's economy over the last two years, where the rise in exports to record levels have provided Chinese firms with stable demand. Read more
11:45 AM
RBI POLICY VIEW: India is still a popular international investment hub
With the RBI's announcement of the fifth consecutive rate increase, loan rates will increase even further. The repo rate was increased by 35 bps, bringing it to 6.25%. The announcement matched what the market anticipated.
Despite a reduction in the GDP growth prediction for India from 7% to 6.8%, the growth prospects remain strong as seen by the strong credit growth data, increase in the PMI manufacturing/services, and tractor sales, among other positive indicators. India is still a popular international investment hub. As the gradual tightening of interest rates ends, it is anticipated that capital inflow would improve even further.
Given the concerns about Chinese demand for oil, the price of petroleum has fallen from its heights and is unlikely to test new highs. While core inflation is anticipated to stay sticky, crude prices will be kept in check thanks to the strengthening of the rupee and the decline in Chinese demand.
Views by: Raghvendra Nath, MD, Ladderup Wealth Management
Despite a reduction in the GDP growth prediction for India from 7% to 6.8%, the growth prospects remain strong as seen by the strong credit growth data, increase in the PMI manufacturing/services, and tractor sales, among other positive indicators. India is still a popular international investment hub. As the gradual tightening of interest rates ends, it is anticipated that capital inflow would improve even further.
Given the concerns about Chinese demand for oil, the price of petroleum has fallen from its heights and is unlikely to test new highs. While core inflation is anticipated to stay sticky, crude prices will be kept in check thanks to the strengthening of the rupee and the decline in Chinese demand.
Views by: Raghvendra Nath, MD, Ladderup Wealth Management
11:36 AM
Larsen & Toubro hits record high; market-cap crosses Rs 3 trn mark
Larsen & Toubro (L&T) joined the elite club of companies with Rs 3 trillion market capitalization on the BSE, after its share price hit a new high of Rs 2,139.70, on rallying 2 per cent in intra-day trade on Wednesday. With a market-cap of Rs 3.01 trillion, at 10:30 AM, L&T stood at number 20th position in the overall market-cap ranking, the BSE data shows. Read here
11:28 AM
ECONOMIST VIEW: More space remains for another hike of 25 bps
The MPC expectedly delivered a 35 bps hike with 5-1 vote and kept stance unchanged at “withdrawal of accommodation”. The tone was still cautious and data dependent, and with the governor emphasizing the need to calibrate the policy.
We note that while the governor justified INR’s resilience on net, a relatively dovish tone would not have augur well for INR which has seen sharp correction vs peers in last couple of days. This has been on account of already low forward premia in FX, and signalling of a pause would have further pressured the FX fwd premia on the downside, making carry trades less attractive for FPIs, implying fears of unwinding of these trades, ceteris paribus.
A 35bps hike today implies the ex-post real rates still sub 1% -- RBI's estimated real neutral rate, keeping 6-month ahead inflation as an anchor (a more certain trajectory vs one-year ahead), which may imply more space for another shallow hike of up to 25bps to reach a neutral rate (albeit not necessarily implying end of cycle) .
At this point, we still think that the RBI would not turn too restrictive however, the extent of global disruption will remain key. The still-fluid global situation might require frequent adjustments in macro and policy assessments ahead as far as terminal rates are concerned.
View by Madhavi Arora, Lead Economist, Emkay Global Financial Services.
At this point, we still think that the RBI would not turn too restrictive however, the extent of global disruption will remain key. The still-fluid global situation might require frequent adjustments in macro and policy assessments ahead as far as terminal rates are concerned.
View by Madhavi Arora, Lead Economist, Emkay Global Financial Services.
11:17 AM
RBI POLICY VIEW: Rate hike to impact home loan EMIs, reduce affordability
The RBI has been extremely judicious in their decision to raise repo rate by 35 bps as against the previous revisions, which were much sharper. The move is a balanced approach towards continued economic growth despite the higher than tolerance level of inflation.
Since the rate hike cycle in May 2022, home loan products have become expensive by around 150 bps before today’s hike. The lending rates have risen significantly, especially for the loans linked to External Benchmark based Lending Rate (EBLR) where there has been a 100% transmission of repo rate.
Loan products linked to MCLR rate are also up by around 108 bps during this period.
Loan products linked to MCLR rate are also up by around 108 bps during this period.
This hike will further impact EMIs and reduce home affordability. Simply based on the interest rate impact in this rate cycle, the Knight Frank Affordability Index has recorded a cumulative deterioration of an average of 3% across the country.
However, as seen since the beginning of the rate hike cycle, latent demand has sustained, albeit with some moderation, in cumulative housing sales. The 35-bps rate hike by the RBI may be considered moderate in the current context and therefore considered a welcome move.
Views by Shishir Baijal, Chairman & Managing Director, Knight Frank India.
However, as seen since the beginning of the rate hike cycle, latent demand has sustained, albeit with some moderation, in cumulative housing sales. The 35-bps rate hike by the RBI may be considered moderate in the current context and therefore considered a welcome move.
Views by Shishir Baijal, Chairman & Managing Director, Knight Frank India.
11:10 AM
Rate sensitive shares trade mixed as RBI hikes repo rate by 35 bps to 6.25%
Shares of rate sensitive sectors such as financials, automobiles and real estate traded on a mixed note after the Reserve Bank of India (RBI) on Wednesday hiked the repo rate by 35 basis points (bps) to 6.25 per cent. Read more
11:00 AM
Realty stocks lose grip; DLF down 2%
10:56 AM
MARKET CHECK: Sensex losing ground; sheds 200 pts
10:55 AM
Views by Anil Rego, founder, and fund manager at Right Horizons
RBI POLICY VIEW: Expect repo rate to peak at 6.7% in current cycle
RBI commentary and announcement is mostly in line with street expectations and thus we don’t see any material impact on the economy from RBI rate hike decision.
Inflation is expected to be around 5% in Q1FY24 and 5.4% in Q2FY24, thus repo rate is expected to peak around 6.7% for this rate hike cycle.
Government Capex has slowed down in Q2, which is a bit negative however since we are entering into pre-election year, we can see that reversing over the next two quarters.
Inflation is expected to be around 5% in Q1FY24 and 5.4% in Q2FY24, thus repo rate is expected to peak around 6.7% for this rate hike cycle.
Government Capex has slowed down in Q2, which is a bit negative however since we are entering into pre-election year, we can see that reversing over the next two quarters.
Views by Anil Rego, founder, and fund manager at Right Horizons
10:50 AM
ALERT :: Capacity in UPI will be further enhanced, says RBI guv
10:47 AM
ALERT :: Rupee has appreciated by 3.2% in real terms between April and October, says RBI Guv
Note: Policy address has concluded
10:46 AM
Nifty Bank pares gains to turn flat; Federal Bank slips 1%
10:42 AM
MARKETS: Sensex erases 100-pts gain; dips in red
Topics : Stock Market MARKET LIVE MARKET WRAP Markets S&P BSE Sensex NSE Nifty stock market trading RBI monetary policy RBI Policy RBI repo rate HDFC AMC Siemens Financials Nifty Realty Shaktikanta Das
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First Published: Dec 07 2022 | 8:06 AM IST
