The Reserve of India (RBI) in its third bi-monthly monetary policy review kept the repo rate unchanged at 6.50 per cent citing upside risk to March 2017 inflation target.
The Reserve of India (RBI) in its third bi-monthly monetary policy review kept the repo rate unchanged at 6.50 per cent citing upside risk to March 2017 inflation target. It didn’t come as a surprise to stock Markets that were already expecting a status quo from the Governor Raghuram Rajan in his last policy review. Post announcement, the benchmark BSE Sensex was trading over 50 points down at 28,140, while Nifty was trading below the psychological mark of 8,700. Rate-sensitive stocks were trading on mixed note in the late afternoon trade. At 11.27 am, the BSE Auto index and BSE Realty index were down by 0.25 per cent and 0.33 per cent at 21762.17 and 1626.89, respectively. On the other hand, BSE Bankex was trading 0.08 per cent higher at 21,673.13 at the same time.
Raghuram Rajan also cautioned on inflation target of 5 per cent for March 2017 and said factors like food inflation, services and the effect of the seventh pay panel implementation to government employees may have an impact.
On the outlook of rate-sensitive sectors, Pankaj Pandey, head of research, ICICI Securities said,”We are bullish on auto space on account of 7th Pay Commission hike and expectation of robust monsoon. However, we are bullish on selected banking and real estate stocks in the present market conditions.”
With the help of market experts we list out some rate sensitive stocks which can give you good return in the next few quarters.
Zerodha: Nikhil Kamath, co-founder and director, Zerodha is bullish on Tata Motors in the auto space. The auto major has recently announced a stellar international sales with a growth rate of over 20 per cent. Kamath is further bullish on Indiabulls Real Estate among rate sensitive sectors.
Anand Rathi Financial Services: Chandan Taparia, analyst, Anand Rathi Financial Services said, “One can consider stocks such as DLF, LIC Housing Finance, Union Bank, Bank of Baroda, Dewan Housing Finance and Mahindra and Mahindra Financial Services in the present market conditions.”
Phillip Capital: Dinesh Kapoor, AVP at Phillip Capital believes, among the rate sensitives NBFCs like Capital First are looking attractive in the present market scenario. One can consider Punjab National Bank and State Bank of India among public sector bank space.