The RBI (Reserve Bank of India) monetary policy review meet outcome has been announced today. Once again RBI governor Urjit Patel decided to shake the markets with a surprise, which involved another hike in policy repo rate by 25 basis points. Now India’s policy repo rate stands at 6.50% compared to previous 6.25%, whereas reverse repo rate comes at 6.25% from previous 6%. Looks like this was not what investors had in mind, as they indulged in heavy selling in both benchmark indices. 

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The moment RBI announced August policy, Sensex and Nifty 50 gave away nearly 140 and over 35 points. Currently Sensex is trading at 37,498.20 down by 85.81 points or 0.23%, while the Nifty is below 23.45 points or 0.21% trading at 11,333.05. 

Among top losers on BSE were - Vedanta at Rs 217.40 per piece down by 2.18%, followed by Maruti Suzuki at Rs 9349 per piece below 1.66%, Tata Steel at Rs 554 per piece lower by 1.57%, ICICI Bank at Rs 299.30 per piece down by 1.53% and Bharti Airtel at Rs 384.75 per piece down by 1.52%. 

Other companies that tumbled were - Axis Bank (1.47%), SBI (1.11%), Adani Ports (0.90%), Yes Bank (0.84%) and Asian Paint (0.79%). 

The other gainers were - Coal India taking lead at Rs 270 per piece higher by 3.17%, followed by TCS at Rs 1978 per piece up by 1.79%, Sun Pharma at Rs 574.50 per piece above 1.39%, ONGC at Rs 167 per piece above 0.91% and Power Grid at Rs 183.70 per piece up 0.82%. 

Five out of six MPC members opted for a rate hike in policy repo rate today. The decision of the MPC is consistent with the neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. 

RBI governor Urjit Patel says, “Fiscal slippage could cause inflationary pressures.” However, he stated that, capacity utilisation remains robust.