Sensex sinks 294 pts as RBI keeps repo rate unchanged, Nifty nears 18,600

CLOSING BELL, JUNE 8, 2023: Sun Pharma, Kotak Bank, Tech M, M&M, Axis Bank, HUL, Tata Motors, TCS, Nestle India, and Bajaj twins dropped between 1 per cent and 3 per cent

SI Reporter New Delhi

Sensex sinks 294 pts as RBI keeps repo rate unchanged, Nifty nears 18,600

11:54 AM

OMCs can be expected to lower fuel prices, says top ministry official

State oil marketing companies (OMCs) have made up for losses and can be expected to lower petrol and diesel pump prices, said a top official of the Petroleum and Natural Gas Ministry. READ

11:46 AM

Expert on RBI Policy: Rate pause signals previous 250 bps rate hike yet to fully impact the economy

As anticipated, the Reserve Bank of India (RBI) has chosen not to increase interest rates, citing the belief that the previous 250 basis points rate hike implemented since last May has yet to fully impact the economy. The presence of global uncertainty is an additional factor influencing the RBI's cautious approach, as a rate hike could potentially hinder economic growth. Predictions indicate that inflation for the fiscal year 2024 is expected to remain above 4 percent, and fluctuations in crude oil prices, influenced by Saudi Arabia's announcement of production cuts, could further elevate inflation. The unresolved uncertainty surrounding El Nino also poses a risk of inflationary spikes. Consequently, the RBI has opted to adopt a careful stance by refraining from raising interest rates.

Views expressed by Sunil Damania, Chief Investment Officer, MarketsMojo

11:37 AM

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

The Nifty Bank, Nifty Financial, Nifty Private and Nifty PSU Bank indices were up 0.35 - 0.51 per cent, while Nifty Realty and Nifty Auto indices were down 0.10 - 41 per cent. READ

11:29 AM

Explained: Repo rate unchanged at 6.5%, worst over for home loan borrowers

The Reserve Bank of India on Thursday kept the key repo rate unchanged at 6.5 per cent, which means that if you have an existing home loan, a repo rate pause will not impact your Equated monthly installments ( EMI), but if you have a floating rate loan, you may benefit from the rate pause. READ

home loans, property, loans, banks, credit

11:15 AM

BSE Power index gains 2% on hopes of higher demand; NTPC hits 5-year high

Ratings agency ICRA said the likelihood of El Nino in FY24 may have a positive impact on electricity demand. READ

11:02 AM

EXPERT VIEW: Interest rate pause to be supportive of housing demand

We appreciate the decision of the RBI to maintain the REPO rate unchanged for the second consecutive time. We believe that this status quo will facilitate positive decision-making for home buyers.

The decision to pause is well justified, as the inflation outlook for FY24 is within the central bank's tolerance range. However, the momentum in key macro-indicators related to growth is uneven. Indicators such as GST collection, manufacturing and services PMI, and E-way bills suggest strength in economic growth.

However, certain crucial growth indicators, particularly consumer durable goods in the IIP (Index of Industrial Production), which reflects household consumption, are yet to show sustained recovery.

Regarding the real estate sector, the trajectory of India's economic growth will be beneficial. Despite a significant increase in interest rates, the sector has been performing well.

Real estate loan demand from both housing and commercial segments has remained strong, despite a 150 bps rise in the base lending rate (MCLR) over the past year. However, we remain cautious about the industry, as the complete transmission of the repo rate hikes to lending rates is yet to be observed.

Views by Shishir Baijal, Chairman and Managing Director, Knight Frank India

10:46 AM

Expert on RBI Policy: Lower FY24 inflation estimate signals end of the rate-hike cycle

Even though the MPC’s rate decision and stance have come on expected lines as pause and withdrawal of accommodation respectively, the Governor’s commentary can be interpreted as positive. The central bank’s projection of FY24 CPI inflation has come at 5.1%, lower than 5.2% projected in the previous meeting. This indicates that the MPC has come to the end of this rate hiking cycle. If the monsoon is normal and the global scenario is favourable, the MPC may think about a rate cut by end CY2023 or early 2024. From the stock market perspective, this is positive. The Governor’s remark that “India’s economic and financial sector remains resilient amidst global turmoil” is a reflection of India’s strong and improving fundamentals.

Views expressed by Dr V K Vijayakukar, Chief Investment Strategist at Geojit Financial Services

10:44 AM

Expert on RBI Policy: Sharp swing between WPI, CPI spreads to benefit consumer-centric companies

RBI adopts its realistic approach of balancing growth & inflation dynamics, decoupling from the global economy. Also, the past 2 months of CPI inflation is below the RBI tolerance limit, which gives comfort to the RBI to keep repo rate & stance unchanged. The sharp swing between WPI & CPI spread from positive 880 bps in May'22 to negative 560 bps in Apr'23 will benefit the gross margins of consumer facing sectors.

Views expressed by Manish Jain, Fund Manager, Coffee Can PMS, Ambit Asset Management

10:39 AM

RBI Policy LIVE: Guv Das concludes his monetary policy address

>> RBI will do everything necessary to keep long term inflation expectations anchored.
>> Will remain proactive in dealing with emerging risks to price and financial stability.

10:37 AM