Rate sensitive stocks such as banks, realty and autos gained on Wednesday, after the Reserve Bank of India’s (RBI) MPC hiked repo rate by 50 bps. Nifty Bank, Nifty PSU Bank, Nifty Private Bank, and Nifty Realty indices were trading in positive territory, gaining up to 2.3 per cent. A few auto stocks too were seen trading in green. Domestic equity market benchmarks BSE Sensex and Nifty 50 turned positive soon after RBI Governor Shaktikanta Das concluded the MPC meet. The top contributor to the indices’ gain was State Bank of India (SBI), which jumped over 2 per cent to day’s high of 475.50 apiece.
Other bank stocks such as HDFC Bank, Kotak Mahindra Bank, Axis bank, ICICI Bank, and IndusInd Bank stocks, gained in the range of 1-04 per cent. Analysts say even though the current rate hike of 50 basis points is quite steep, markets especially banking stocks had already factored in this as was seen yesterday. “Technically, investors can hold banking stocks like ICICI & HDFC Bank for higher targets of 775 & 1430 in the coming days,” AR Ramachandran, Co-founder & Trainer, Tips2Trades, told FinancialExpress.com.
RBI Governor Shaktikanta Das also announced to double the limit of loans from co-operative banks. “This will help the cooperative banks to give more housing loans. We continue with our buy call on Sobha Developers and Oberoi Realty,” Yash Gupta- Equity Research Analyst, Angel One, said. Nifty Realty index was up 2.3 per cent led by gains in Macrotech Developers (Lodha), DLF, Oberoi Realty, Brigade Enterprises, and Sobha.
Analysts said that it is evident that home loan interest rate hike will impair the home buying rally as pay out in terms of EMI is scheduled to rise. “But, in our view, this crater in demand sentiment is a makeshift move, as home loans are based on floating rate for a long tenure. The EMI constraint will be eased as rates are expected to normalize once the global situation is stabilised,” Niranjan Hiranandani, MD, Hiranandani Group, said.
Auto stocks, other rate sensitive stocks with respect to policy rate change, marginally fell, on the back of losses in MRF, Bajaj Auto, TVS Motor, Maruti Suzuki, Escorts, and Eicher Motors. While Hero MotoCorp, Bosch, Bharat Forge, Mahindra & Mahindra, and Ashok Leyland among others were ruling in the positive territory.
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