Banks, NBFCs gain as RBI presses the pause button

Rate sensitive stocks, especially from the banking and lending segments, were in the limelight on Thursday as the Reserve Bank of India (RBI) took a pause in terms of hiking interest rates. 

During the afternoon session, while the benchmark 30-share Sensex was up nearly 260 points or 0.44 per cent at 59,949, the top gainers among the Sensex constituents were Bajaj Finance, Bajaj Finserv, Indusind Bank, State Bank of India (SBI) with the HDFC twins – HDFC and HDFC Bank – also trading in the green. 

While both, Bajaj Finance and Bajaj Finserv, along with Indusin Bank were all up by over two per cent each, the country’s largest bank SBI was trading nearly 1.4 per cent higher during the afternoon trading session. 

HDFC and HDFC Bank were marginally up even as ICICI Bank and Axis Bank were in the red with marginal losses. 

“Markets are reacting positively to the policy with easing of bond yield and upsurge in the interest rate sensitive stocks. We remain positive on equity markets and expect interest rate sensitive sectors like real estate, auto, banks, financials along with engineering/capital goods to lead the rally in the near-to-medium term,” said Jaideep Arora, CEO, Sharekhan by BNP Paribas. 

“The overall commentary is also quite positive with expectations of a broad-based growth in the economy with financial stability reflected in the rising forex reserves and current account deficit under control,” he added. 

Earlier in the day, RBI governor Shaktikanta Das said that the central bank’s monetary policy committee unanimously decided to keep the policy rate unchanged at 6.50 per cent. He added that the central bank has decided to maintain its “withdrawal of accommodation” stance. 

Further, the central bank has projected inflation to drop to 5.2 per cent for FY24. It projected inflation for Q1FY24, Q2FY24, Q3FY24, and Q4FY24 at 5.1 per cent, 5.4 per cent, 5.4 per cent, and 5.2 per cent, respectively. 

“Equity markets had already started consolidating but now since the Interest rates also near the peak cycle, it is an ideal launching pad of new bull market locally and globally,” said Umesh Kumar Mehta, Chief Investment Officer, SAMCO MF. 

Also read: RBI MPC Meet 2023: MPC unanimously votes to keep repo rate unchanged at 6.5%

Also read: RBI MPC announcement: Central bank keeps repo rate constant, other key takeaways