Financials, banks, realty stocks gain up to 9% after RBI MPC keeps policy rates unchanged; auto stocks fall

BSE Sensex surged over 500 points to top 38,200 points after Reserve Bank of India (RBI) Governor Shaktikanta Das announced to keep the repo rate and reverse repo rate unchanged at 4 per cent and 3.35 per cent, respectively. The Monetary Policy Committee decided unanimously to leave the repo rate at the existing level, and maintain an accommodative stance on policy. The RBI MPC noted that the inflation will remain elevated in the second quarter and ease in the second half of the current fiscal. India’s economic growth will contract in the first half of the fiscal beginning April 2020.

The Nifty Financial Service index was top sectoral gainer, up nearly 2 per cent, with all 20 constituents trading in green. REC, Bajaj Finance, ICICI Bank, Shriram Transport Finance Company, ICICI Prudential Life Insurance Company and Mahindra & Mahindra Financial Services were top gainers. Similarly, Nifty Bank index gained 1.46 per cent to trade at 21,823, led by gains in HDFC Bank, Kotak Mahindra Bank, ICICI Bank and State Bank of India (SBI), up in the range of 1-2.4 per cent. Out of 12 constituents, just Bandhan Bank was trading in the red, down 1 per cent.

Nifty Realty index too rose 1.51 per cent post MPC announcements. Prestige Estates Projects was the top gainer, up nearly 9 per cent. It was followed by The Phoenix Mills, Oberoi Realty and Sobha. “The announcement by RBI to facilitate the National Housing Bank with liquidity of Rs 5000 cr is an encouraging step for the housing sector which has been under immense stress since the lockdown. This move will help NBFCs and housing finance companies to lend more money to homebuyers and generate demand back in the market. With unsold inventories available in major markets, homebuyers should consider buying homes now,” said Farshid Cooper, MD, Spenta Corporation.

While, Nifty Auto index was ruling in the negative territory, dragged by losses in Eicher Motors, Maruti Suzuki, Motherson Sumi Systems, M&M and Bajaj-Auto. On the contrary, Exide Industries, Tata Motors, TVS Motors were among the top index gainers.

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