Bajaj Finance was the top gainer in the Sensex pack, rising around 4 per cent, followed by Maruti, SBI, Bajaj Finserv, Sun Pharma and Asian Paints. NSE Nifty rallied 293.05 points to 17,469.75.
ICICI Bank, the second-largest private sector lender and state-owned Indian Bank on Monday raised their lending rates across all tenors in anticipation of a rate hike by the RBI later this week. The rates have been increased across all tenors under the marginal cost of funds-based lending rate (MCLR) system, a move that will make EMIs expensive for those who availed loans benchmarked against the MCLR. Under the revised rates, effective August 1, ICICI Bank's one-year MCLR has increased by 15 basis points or 0.15 per cent to 7.90 per cent, while the overnight MCLR rose to 7.65 per cent, as per information posted on the bank's website.
The RBI was not party to the decision to demonetize 500 and 1,000-rupee notes, which was taken at the highest level of India's political leadership.
ICICI Bank was the top gainer in the Sensex pack, rising around 4 per cent, followed by UltraTech Cement, Sun Pharma, Bharti Airtel, HUL, SBI, L&T, Axis Bank and IndusInd Bank. On the other hand, Reliance Industries, Bajaj Finserv, HCL Tech and HDFC were among the laggards.
RBI recently cut repo by 0.25 percentage point, taking the rate to 7.25 per cent in three reductions since January.
Reserve Bank Governor Shaktikanta Das on Friday said the rupee is holding up relatively well when compared to the currencies of emerging market peers and advanced economies. Days after the domestic currency breached the 80-level against the dollar, Das said Reserve Bank of India (RBI) has zero tolerance for volatile and bumpy movement in the rupee and added that the central bank actions have helped in smoother movement. He said RBI has been supplying US dollars to the market to ensure adequate supply of liquidity and also clarified that the central bank does not target a particular level for the currency.
'Pump prices of petrol and diesel have reached historical highs. An unwinding of taxes on petroleum products by both the Centre and the states could ease the cost-push pressures,' the Monetary Policy Committee (MPC) has said.
The Reserve Bank of India's interest rate decision, domestic macroeconomic data and global trends will dictate terms in the equity markets this week, analysts said. Trading activity of Foreign Portfolio Investors (FPIs) will also influence markets, they added. "The Indian market will be closely monitoring the Reserve Bank of India's Monetary Policy Committee (MPC) meeting scheduled for June 6-8, 2023. Aside from that, market participants will be keeping an eye on the progress of monsoon," said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.
Reserve Bank of India (RBI) Governor Shaktikanta Das said on Friday said the central bank has developed an innovative artificial intelligence and machine learning (AI/ML) based model MuleHunter.ai to address the growing issue of mule bank accounts that are often used for committing financial fraud. Developed by the Reserve Bank Innovation Hub, the new initiative is piloted with two public sector banks.
The Reserve Bank of India on Wednesday retained the economic growth projection for the current financial year at 10.5 per cent, while cautioning that the recent surge in COVID-19 infections has created uncertainty over the economic growth recovery. In its last policy review, the RBI had projected a GDP growth rate of 10.5 pc for FY'22. Taking various factors into consideration, it said, "the projection of real GDP growth for 2021-22 is retained at 10.5 per cent consisting of 26.2 per cent in Q1, 8.3 per cent in Q2, 5.4 per cent in Q3 and 6.2 per cent in Q4."
Fitch Ratings on Tuesday retained India's economic growth forecast at 7 per cent for the current fiscal, but cut projections for the next two financial years saying the country is not impervious to global developments. In its December edition of the Global Economic Outlook, Fitch projected India's GDP to grow at 7 per cent in the current fiscal, at a slower rate of 6.2 per cent in 2023-24 and at 6.9 per cent in 2024-25. In September, Fitch projected 7 per cent growth for the current fiscal, followed by 6.7 per cent in 2023-24 and 7.1 per cent growth in 2024-25.
The repo rate has been left unchanged at 4 per cent, Governor Shaktikanta Das said while announcing the decisions taken by the central bank's MPC.
The Reserve Bank of India, for the second straight time, on Thursday kept its key policy rate unchanged at 5.15 per cent, maintaining its accommodative policy stance as long as it was necessary to revive growth. The central bank retained GDP growth at 5 per cent for 2019-20 and pegged it at 6 per cent for the next fiscal.
Given the pressure from India Inc and the banking fraternity, it is surmised that the portfolio rejig will take place before April.
Here is some background on the candidates seen as potential successors to Rajan at the RBI
This is the fifth straight cut in rates by the Reserve Bank of India in as much policy reviews in 2019, and takes the total quantum of reductions to 1.35 per cent.
The Reserve Bank may be hitting the end of its tolerance for high inflation and will most likely hike interest rates in the first half of 2022, analysts said on Friday. The central bank will also start rolling back its accommodative policies which have led to easy liquidity conditions, they said. The view from analysts came even as inflation cooled down to 5.6 per cent for July, after two months of breaching the upper end of the RBI's tolerance band of 6 per cent.
Of the six-member rate-setting monetary policy committee, five members voted for a 25 bps cut while one by 40 bps, the RBI said.
Top Sensex gainers include Hero MotoCorp, Bajaj Auto, Asian Paints, IndusInd Bank, HUL, and Maruti, rallying up to 5.87 per cent. While, ICICI Bank, NTPC and ITC slipped up to 0.13 per cent.
Mortgage lender HDFC Ltd on Friday hiked its lending rate by 50 basis points hours after the Reserve Bank raised the benchmark interest rate to tame inflation. The move would increase EMIs for housing loans by the firm. "HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 50 basis points, with effect from October 1, 2022," the country's biggest housing finance company said in a statement.
Tata Steel was the top gainer in the Sensex pack, climbing 2.11 per cent, followed by Infosys, HDFC Bank, HDFC, Kotak Bank, M&M and PowerGrid. NSE Nifty jumped 142.05 points to end at 17,605.85.
In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the RBI for transactions processed in the RTGS and NEFT systems, RBI said.
A continued focus on low inflation will be important to keeping gold imports, IMF said.
Five of the six external members had suggested that the central bank should reduce the policy rate.
Stock markets will be driven by quarterly earnings by index majors, global trends and the RBI's interest rate decision this week after digesting news on budget proposals and US Federal policy outcome, say analysts. The trading activity of foreign investors and the movement of global oil benchmark Brent crude would also dictate trends in equities. "On the domestic front, the MPC (Monetary Policy Committee) meeting is scheduled from February 6-8.
The government has extended the term of Reserve Bank of India Governor Shaktikanta Das by another three years upto December 2024, according to an official order.
Retail inflation declined to a five-month low of 4.85 per cent in March mainly due to cooling food prices, inching towards the Reserve Bank's target of 4 per cent, according to official data released on Friday. The Consumer Price Index (CPI) based retail inflation was 5.09 per cent in February and 5.66 per cent in March 2023. Previously, CPI-based inflation was the lowest at 4.87 per cent in October 2023.
The Reserve Bank on Friday retained the GDP forecast for the current financial year at 9.5 per cent and flagged global semiconductor shortages, elevated commodity prices and potential global financial market volatility as downside risks to economic growth. In his address after the three-day meeting of the rate-setting panel, RBI Governor Shaktikanta Das said recovery in aggregate demand gathered pace in August-September, and it is reflected in high-frequency indicators, like railway freight traffic; port cargo; cement production; electricity demand; e-way bills; GST and toll collections. "The ebbing of infections, together with improving consumer confidence, has been supporting private consumption," he said, and added the pent-up demand and the festival season should give further fillip to urban demand in the second half of the financial year.
Fintech companies believe that the impact of Reserve Bank of India's order last week on unsecured loans will be visible in six to 12 months and prompt them to diversify and strengthen their secured portfolio. Fintechs which source funds through banks or non-banking finance companies (NBFCs) are looking at quickly building their secured portfolio options to at least 40 per cent of their total portfolio. "Over the medium to long term, as part of our product strategy, we are evaluating secured products which can be enabled over a digital platform" said Yogi Sadana, the founder of Zype, a lending-focussed fintech.
If imputed inflation for April and May is used, then you have inflation of over 6 per cent for two consecutive quarters, which is a worrying signal for the RBI.
Dr Nagesh Kumar, one of the three new MPC members, wanted the MPC to reduce the repo rate by 25 basis points to 6.25%.
For July-September, it pegged CPI-based retail inflation at 4.2 per cent which it saw firming up to 4.8 per cent in the second half of the current fiscal.
Concerned over elevated inflation, Reserve Bank of India on Friday decided to leave the benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance, implying more rate cuts in the future if need arises to support the economy hit by the Covid-19 pandemic.
The Reserve Bank of India on Friday raised the retail inflation forecast for 2021-22 to 5.7 per cent due to supply side constraints, high crude oil and raw materials cost. The RBI in June had pegged the retail inflation estimate at 5.1 per cent for the current financial year. The RBI has the mandate to keep inflation in a band of 2-4 per cent, with a tolerance level of 2 per cent on either side.
The broader 50-issue NSE Nifty too slipped from its record high, shedding 10.30 points or 0.09 per cent to end at 11,346.20.
Equities went into a tailspin on Wednesday after the Reserve Bank surprised the market with a mid-cycle rate hike in a bid to tame soaring inflation.
A likely easing in inflationary pressures in the forthcoming months will reopen the window for the RBI to once again prioritise growth and ease its interest rates.
'Government of India has the right to give directions to RBI'.
The Reserve Bank will hold a special meeting of its rate-setting committee on November 3 to prepare a report for the government on why it failed to keep retail inflation below the target of 6 per cent for three consecutive quarters since January. The six-member Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das will prepare the report on reasons for failure to meet the inflation target as well as the remedial measures the central bank is taking to bring down prices in the country. "Under the provisions of Section 45ZN of the Reserve Bank of India (RBI) Act 1934... an additional meeting of the MPC is being scheduled on November 3, 2022," RBI said in a statement on Thursday.
'Whether I am optimistic or pessimistic is not the issue; I am just going by the evidence available.' 'The Indian economy and financial sector are now well-placed and very resilient in dealing with any kind of spillover coming from the external world.'
