RBI MPC Meeting: Rate-sensitive sectors and stocks turn green as central bank surprises Street with pause in rate hike Zee Business

Hindustan Unilever reported a 10% rise in profit and an 11% growth in sales in the March quarter, saying the rural slowdown is bottoming out but price reductions to boost demand can only happen once inflation slows further. Oil cartel OPEC+ announced a surprise output a few days ago, jolting policymakers. The looming impact reverberated across asset classes as it fuelled fears of further inflationary pressures. The unseasonal rains and hailstorms in many parts of India recently have damaged crops, exposing thousands of farmers to losses and raising the risk of further food price inflation.

Experts are predicting a 25 day trading utilizing transferring averages hike as a result of sustained inflation, El Nino-related disruptions and the global banking crisis. The unseasonal rains and a shock production cut announced by OPEC+ might have changed the MPC calculations if it had been considering to pause rate hikes. Experts, who had earlier expected a pause in rate hikes, now expect a 25-bps rate hike in April.

At the bottom of the table you’ll find the data summary for the selected range of dates. By Yasin Ebrahim Investing.com — The S&P 500 fell Tuesday, after struggling to hold onto gains as investors remained wary of making big bets on stocks just as data pointing to a stronger… By Yasin Ebrahim Investing.com — The S&P 500 rallied Tuesday, as better-than-expected quarterly results continued to support sentiment on stocks for the second-straight day. By Yasin Ebrahim Investing.com — The Dow closed higher Tuesday, as better-than-expected quarterly results continued to support sentiment on stocks for the second-straight day, though… By Yasin Ebrahim Investing.com — The Dow closed flat Thursday, as strength in tech helped soften the blow from a stumble in energy stocks amid growing concerns about the economy ahead of… The price-earnings ratio is a company’s share price to the company’s Earnings per Share.

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These were already beginning to manifest in various forms, which is why the RBI was worried. We also look at the likelihood of each of the scenarios from a pragmatic standpoint. All eyes are now on the monetary policy decision and dealers suggest that the street has priced in a 25 basis points rate hike. RBI MPC has taken a pause and kept the repo rates unchanged, against the majority market view, Sandeep Bagla – CEO, Trust Mutual Funds. He added that the stance remains unchanged at the enigmatic ‘withdrawal of accommodation’.

It is also true that, should inflation come down sharply, then the RBI would obviously be inclined to be more liberal in cutting rates from these levels. However, the risk in this approach is that it becomes too reactionary and does not give a good picture to the markets about what is the long term strategy of the RBI and the government on rates. RBI has highlighted that the pause in rates should not be construed as the end of the rate hike cycle, but things may not he as simple as that. Hiking rates has a cost in that it increases the cost of funds in the economy, raises the borrowing costs and also depresses valuations of equity.

China’s Shanghai Composite traded flat, lower by 0.02% while the Shenzhen Component lost 0.03%. A combination of HDFC twins and index heavyweights ensured the Nifty 50 index gained for the fourth day in a row on Wednesday. The index has now gained over 600 points during the last four trading sessions. The wheat crop looked promising until early March when the weather became unfavourably hot. “Now, rains and hail have flattened the crop. It’s a double whammy for us,” Ramandeep Singh Mann, a farmer in Punjab, told PTI. Some experts believe the unseasonal rains could just affect the quality of the crop instead of bringing down the output.

For the RBI, the pause was an experiment but also a mid-way compromise between the demands of macroeconomics and the demands of the industry. The pause may not be the end of the rate hike, but the RBI would surely need a very strong base case to get hawkish all over again. The RBI MPC meeting will conclude on Thursday, following which, the RBI Governor Shaktikanta Das will announce if there is a change in the regulatory body’s stance as well as the repo rate.

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India’s major chunk of wheat-producing areas including Punjab, Haryana, Uttar Pradesh and Madhya Pradesh, saw rains flattening crops in many parts. Economists from Barclays, Deutsche Bank, Care Ratings, Bank of Baroda, DBS, Kotak Mahindra Bank and Yes Bank expect a 25 bps increase on Thursday and a pause after that. Catch the latest updates on the firstRBI policy reviewof the new financial year. Bagla expects both GDP and inflation to be significantly below RBI’s year-end estimate of 6.5 per cent and 5.2 per cent, respectively.

According to the NSE, stocks are prohibited in the F&O sector when they have exceeded 95% of the market-wide position limit . During the F&O ban period, no new positions are permitted for F&O contracts in that stock. Here’s a look at the 9 key things to know before the share market opens on Thursday.

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This is the first meeting of the Monetary Policy Committee in the new fiscal. The Reserve Bank of India on Thursday hit the pause button and decided to keep the key benchmark policy rate at 6.5 per cent even as inflation is trending above its tolerance level. The rate hike has been paused after six consecutive rate increases aggregating to 250 basis points since May 2022.

Our research team is composed of some highly qualified research professionals, their expertise range across sectors. “The Bank Nifty index ahead of the RBI policy continued its strong momentum and ended on a high note. The index next hurdle on the upside stands at the 41,500-41,600 zone which can act as a profit-booking zone for the short term. The index, however, surpassing those levels on a closing basis, can extend the rally towards 42,000/42,500 levels. The lower-end support is visible at the 40,600-40,500 zone, which will cushion the bulls,” said Rupak De, Senior Technical Analyst, LKP Securities. Stocks in Asia-Pacific traded mixed as Japan’s Nikkei 225 tanked 1.11% and Hong Kong’s Hang Seng index declined 0.18%.

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Traditionally, any value under 1.0 is considered a good P/B value, indicating a potentially undervalued stock. Market cap or market capitalization is the total market value of all of a company’s outstanding shares. Investments in securities market are subject to market risk, read all the related documents carefully before investing. Eight of the 13 major sectoral indexes declined, with the heavyweight financials and information technology sectors shedding 0.3% and 0.5%, respectively. The benchmark Nifty 50 and S&P BSE Sensex racked up a fourth straight session of gains on Wednesday, aided by financial stocks, although the focus remained squarely on the RBI.

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We will have to wait and see what the RBI governor decides, because ultimately despite the MPC, it’s the governor’s call. That is exactly what the RBI has said, but things may not be as simple as that. For instance, even before the RBI MPC meet, the trade bodies like CII and the FICCI had been urging the RBI governor to go slow on rate hikes. Firstly, it had led to a sharp fall in the net profit margins of the Indian companies. In addition, the interest coverage ratio and the debt coverage ratio were also deteriorating. That is a solvency issue and it could have larger repercussion on the rating of Indian companies.

For all other news related to business, politics, tech, sports and auto, visitZeebiz.com. Similarly, other rate-sensitive sectors such as Nifty Realty surged almost 1 per cent and Nifty Auto grew marginally immediately after the RBI policy. On the contrary, Nifty Consumer Durables recovered from its lows to trade around 0.3 per cent lower after the monetary policy verdict.

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• The overall chart pattern is getting stronger as per smaller and longer term charts like daily and weekly.
• Bank failures and contagion risks are forcing central banks to take additional notice,” Das said on Thursday.
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• The short term trend of Nifty continues to be positive and we expect this upside momentum to continue in the coming sessions.

Yet, the feahttps://1investing.in/ of a reduced output due to March heat and now rains stay. The RBI might feel pressured to follow the US Federal Reserve and the European Central Bank’s rate-hike action. Madison Pacific Properties, Inc. engages in the acquisition, development, and management of industrial and commercial real estate properties. The company was founded on April 30, 1998 and is headquartered in Vancouver, Canada. World-class wealth management using science, data and technology, leveraged by our experience, and human touch.

Besides what will be the RBI’s seventh consecutive rate hike as it battles to tame inflation, investors will also watch for commentary on the central bank’s policy stance and future hikes. In the Indian context, that accounts for a small part of the consumer basket. One could argue equally for a pause, particularly since growth is expected to slow down, as we have seen from the World Bank estimate of growth for India in this fiscal.

Since May last year, the central bank has increased the rate by 250 bps over inflation concerns. RBI governor Shaktikanta Das on Thursday said the repo rate has been kept unchanged on basis of macroeconomic and financial conditions. It said the RBI would raise its main interest rate by 25 basis points and then pause for the rest of the year. Economists at Goldman Sachs expect the RBI to raise rates by 25 bps to take the repo rate to 6.75 per cent. “With considerable uncertainty around the commodity prices path and global growth, the RBI is likely to retain the tightening policy stance,” it said.

• Indian shares opened lower on Thursday, ahead of what many expect to be the Reserve Bank of India’s final interest rate hike in the current cycle.
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• Yes, Indian Investors can invest in the Marathon Petroleum Corporation Share by opening an international trading account with Angel One.
• Sectors such as Nifty Bank and Nifty Financial Services gained nearly 0.5 per cent, while Nifty PSU Bank jumped nearly 1.5 per cent minutes after the RBI Governor announced the keep the rates unchanged in its April policy decision.
• According to an ET Poll, nine of 10 economists expect a 25 bps rate hike.

Much would depend on how well economic growth holds up in this scenario. This is increasingly worrying for India, because it buys around 85% of its crude oil from overseas markets which stretches its trade deficit and lifts the “imported” inflation. India’s rising purchases of discounted oil from Russia may not be a strong support against the possible risks. However, according to an ET Poll, nine of 10 economists expect a 25 bps rate hike. They also expect the RBI to opt for a prolonged pause after April’s hike.

Speaking about global factors, RBI Governor Das said that the global economy facing a renewed phase of turbulence. “We are witnessing unprecedented uncertainties in geopolitics and economy. Bank failures and contagion risks are forcing central banks to take additional notice,” Das said on Thursday. U.S. stocks lost ground on Wednesday and Treasury yields extended their decline as a batch of data fueled worries that restrictive central bank policies could push the global economy into recession. The Dow Jones Industrial Average rose 0.24%, the S&P 500 lost 0.25% and the Nasdaq Composite dropped 1.07%.