Most rate-sensitive stocks rose on Wednesday after the Reserve Bank of India (RBI) raised the key lending rate by 50bps to 4.9 percent. Here's how shares across sectors reacted to the RBI policy announcement
Most rate-sensitive stocks — the stocks of companies in sectors sensitive to changes in interest rates — edged higher on Wednesday following the Reserve Bank of India’s (RBI's) repo rate hike announcement. The central bank raised the key lending rate by 50 basis points (bps) to 4.9 percent. One basis point is one-hundredth of a percentage point.
This is the second increase in the repo rate — the key rate at which the RBI lends short-term funds to commercial banks — since August 2018. In May, the RBI had, in a surprise move, announced a 40 bps hike in the repo rate.
HDFC Bank, Axis Bank, Ashok Leyland, Tata Motors, Bank of Baroda, Federal Bank, Titan, and Bajaj Electric made it to the green territory post the RBI announcement. ICICI Lombard General Insurance Co, Muthoot Finance, Escorts, Whirlpool, and Crompton were among those in the red.
Realty stocks, too, welcomed RBI’s announcements as Governor Shaktikanta Das said the housing loan limit for urban cooperative banks has more than doubled to account for the rise in realty prices, whereas rural cooperative banks have been allowed to lend for residential housing.
Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares & Stock Brokers, said that while the major part of the rate hike was already factored in by most parts of the financial market, in the near term, a higher than expected rate hike can have some negative influence in the equity and bond market.
Here's how some rate-sensitive stocks reacted to the RBI's announcements:
|Kotak Mahindra Bank||0.58|
|IDFC First Bank||1.44|
|Punjab National Bank||1.44|
|State Bank of India||1.69|
|AU Small Finance Bank||0.6|
|Bank of Baroda||2.99|
|ICICI Lombard General Insurance Co||-3.32|
|ICICI Prudential Life Insurance Comp||0.01|
|Power Finance Corp||1.41|
|Cholamandalam Investment and Fin Co||3.9|
|Shriram Transport Finance Company||0.98|
|Tube Investments of India Limited||2.02|
|Balkrishna Industries Limited||-0.11|
|Mahindra and Mahindra||0.03|
|Sona Blw Precision Forgings||-0.04|
|Indiabulls Real Estate||0.83|
|Blue Star Co||0.16|