RBI Policy: Sensex, Nifty pare losses; rate-sensitive banking, auto, realty indices rise after RBI maintains status quo
Domestic equity market benchmarks the Sensex and the Nifty pared their losses while rate-sensitive sectors such as bank, auto and realty turned green after the monetary policy committee (MPC) of the Reserve Bank of India (RBI) maintained a status quo on policy rates and stance on Thursday (August 10) on expected lines.
Announcing the RBI policy committee meeting outcome, RBI Governor Shaktikanta Das said, “The monetary policy committee unanimously decided to keep the repo rate unchanged at 6.50 per cent.”
Besides, the RBI MPC decides to keep the policy stance unchanged at ‘Withdrawal Of Accommodation’.
Following the announcement, the market benchmark Sensex and Nifty trimmed their losses. The Sensex was 0.09 per cent down at 65,937 while the Nifty was 0.06 per cent down at 19,621 around 10:15 am.
Shares of IndusInd Bank, NTPC and Mahindra and Mahindra were among the top gainers in the Sensex index.
The Nifty Bank index was 0.16 per cent up, the Nifty Auto index was 0.07 per cent up and the Nifty Realty index was trading 0.18 per cent higher at that time.
The market took note of the growth and inflation commentary of Governor Das. The RBI Governor believes the current spike in food inflation is transitory and vegetable prices may correct in the coming months.
The RBI Governor went on to add that Indian economy is 5th largest economy in the world and India’s contribution in global growth is to the tune of 15 per cent. He said that amid challenges in global economy, India has managed to keep inflation under control.
RBI Governor Shaktikanta Das went on to add that India’s inflation at 6. 4 per cent in Q1FY24 is in line with the RBI’s expectations. He said that overall inflation in the financial year 2023-24 is expected to remain at 6.5 per cent.
It was widely expected that the RBI would maintain a status quo on policy rates and stance despite concerns over a spike in inflation, especially food inflation, elevated crude oil prices, and a hawkish US Fed.
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Updated: 10 Aug 2023, 10:26 AM IST
