ICICI Bank, Ashok Leyland, Oberoi Realty, SBI shares: Rate-sensitives slide as 25 bps Oct rate hike bets rise

Interest-sensitive stocks of banks, real estate and automobile took a beating in Tuesday's trade as an eight month high inflation rate for August upped bets of October rate hike by the RBI-led six member monetary policy committee in the festive season.

Post 4.8 per cent inflation print in August, HSBC now forecast inflation to stay remain above 5 per cent for about nine months. It said RBI may hike policy rates by 25 basis points each in the October and December policy meetings, taking the repo rate to 5.75 per cent.

"With the RBI already undertaking aggressive liquidity absorption, we believe the policy reaction function is shifting toward pre-emptive tightening. An October rate hike is now a meaningful possibility, particularly if crude remains elevated. We retain our 7.0–7.2 per cent 10Y yield range for the rest of FY27 and expect 75-100bp of cumulative rate hikes in the current cycle under a sustained oil-shock scenario," MOFSL said.

All BSE Realty index fell amid fears of demand hit due to rise in interest rates. Prestige Estates fell 4.79 per cent to Rs 1,432.95. Godrej Properties and Oberoi Realty fell 4.2 per cent each. Lodha, Aditya Birla Real Estate Ltd, Brigade, DLF and Phoenix Mills fell 2-4 per cent.

All except Tata Motors PV shares fell. Commercial vehicle maker Ashok Leyland fell 4 per cent. Two-wheeler makers Bajaj Auto and TVS Motor declined 2-2.5 per cent. Mahindra & Mahindra Ltd, Hyundai Motor India Ltd, Tata Motors Ltd, Eicher Motors and Maruti Suzuki India fell up to 2 per cent.

Barring HDFC Bank, which was up due to reports regarding CEO succession, all BSE Bankex stocks were in the red. AU SFB fell 2.38 per cent to Rs 1,030.70 and was the worst index performer. State Bank of India (SBI), Bank of Baroda (BoB), ICICI Bank, Axis Bank and IndusInd Bank declined up to 2.25 per cent. Union Bank, Punjab National Bank and Kotak Mahindra Bank also fell at least 1 per cent each.