Sensex adds 364 pts, Nifty nears 19650 post RBI policy; Bajaj Finserv up 6%

Closing Bell on October 6, 2023: The broader markets, too, advanced in-line with the benchmarks with the BSE MidCap and SmallCap index up 0.66 per cent and 0.56 per cent, respectively

1:01 PM

Comment: OMO sale tool to weigh on yields in near term

RBI will maintain tighter liquidity conditions to address higher Inflation risks. Short-term rates likely to remain elevated in near term factoring in tighter liquidity conditions going forward.

 

RBI formally unleashing Bond Open Market Operations (OMO)  sale tool in policy to manage liquidity would weigh on yields in near term. This tool, however, may be used only judiciously to deal with large inflows causing banking system liquidity to stay in surplus zone. 

 

RBI would target Inflation rate of 4% and not 2%-6% range, again signals the policy rates to remain higher for longer until inflation is projected to come below 4%.

Views by Amit Somani, Senior Fund Manager – Fixed Income, Tata Asset Management

 

12:51 PM

RBI Presser LIVE: Have to be fully convinced that CPI is near 4% durably for a re-think on rate stance

>> We have to be fully convinced that CPI is near 4% on a durable basis for there to be ground for re-thinking policy stance, rate cuts, says RBI Guv Das. 

12:45 PM

RBI Presser LIVE: Household financial liabilities have gone up mostly in housing, says Dty Guv Patra

>> During pandemic, households built up pre-cautionary savings
>> Now these savings are being drawn out
>> Absolute savings have gone up
>> Financial libailities are rising, mostly in housing
>> Which can be seen in investment picking up next year

12:41 PM

RBI Pressser LIVE: No change in approach on giving licenses to fintechs, says RBI

>> Fit and proper assessments are taken as always, says deputy governor Rajeshwar Rao, on the Slice proposed merger with North East Small Finance Bank. 

12:36 PM

RBI Presser LIVE: Indian yields look reasonably insulated from global conditions

Strong local reserves help maintain our economy stay insulated from global spillovers, says RBI Deputy Guv Michael Patra. 

12:29 PM

RBI Presser LIVE: Digital ease has led to high growth in certain retail segments

>> No regulation has been laid out, only an advisory to banks, NBFCs on high growth in certain retail credit segments. 

12:23 PM

RBI Presser LIVE: GNPA figures for June end at banks look better

>> Certain segments in retail credit growth high, hence we have flagged it to banks, NBFCs

12:15 PM

RBI Presser LIVE: Indian yields reacting to domestic conditions, says Guv Das

12:13 PM

RBI Presser LIVE: Our liquidity management nothing to do with global surge in yields

Guv Das on announced OMO auction. 

12:08 PM

RBI Presser LIVE: OMO sales to happen as necessary; not related to JP Morgan bond index inclusion

Liquidity went into deficit mode only in last few weeks, but overall it remains in surplus, says Guv Das

12:07 PM

RBI Presser LIVE: Easing core inflation a silver line, headline CPI remains vulnerable

CPI remains vulnerable to recurring and overlapping food price shocks, says RBI Guv Das

 

12:00 PM

Comment :: 'MPC's hawkish language suggests price stability is questionable'

Despite a pause, the RBI MPC's hawkish language suggests that price stability is questionable, and domestic financial conditions will remain tight.

Policymakers are also mindful of the tight external financial conditions and narrowing (IN-US) rate differentials, notwithstanding the comfortable reserves cushion and impending foreign bond inflows.

Post-decision, IGBs were under a cloud, as OMOs could be tapped for liquidity management.

Views by: Radhika Rao, Executive Director and Senior Economist, DBS Group Research

11:49 AM

Comment :: 'Equities may have to compete with bonds in short-run'

It is indeed a turning pitch as far as inflation is concerned for RBI; however, on the other side, global market forces are scaring all the central bankers on higher bond yields, which are getting stronger by the day.

The current pause wouldn’t last long for any central banks. The rates are likely to move higher before the actual pivot happens sometimes in middle of the next year.

So, equities will have serious competition from bonds going forward.

Views by: Umesh Kumar Mehta, Chief Investment Officer, SAMCO Mutual Fund 

11:41 AM

Comment :: 'Expect 10-year bond yield to stay in 7.15-7.35% band in near-term'

While the committee retained its FY24 CPI inflation projection at 5.4%, it continues to remain vigilant about the volatile food and energy prices.

On the liquidity front, the Governor hinted at the possibility of using OMO sale operation, if required. Hence, while the policy outcome was largely in line with expectations,

The possibility of OMO sale operations by the RBI will keep bond bulls in check till further clarity emerges.

We expect 10-year benchmark government bond to trade in the 7.15%-7.35% band in the near term.

Views by: Churchil Bhatt, Executive Vice President & Debt Fund Manager, Kotak Mahindra Life Insurance Company 

11:28 AM

ALERT :: RailTel Corporation receives order from Jammu Smart City worth Rs 67.95 crore