Auto, Bankex, Consumer Durables, PSU, IT, TECK, Capital Goods, Power indices are the gainers, while Oil and gas indices is only the loser.
At 9:23 AM, The Sensex is up 128 points at 28,645, while NSE Nifty is up 41 points at 8,701.
BSE Mid-cap and BSE Small-cap was flat.
Auto, Bankex, PSU, IT, TECK, Consumer Durables, Capital Goods, Power indices are the gainers, while Oil and gas indices is only the loser.
Indian rupee inched lower, as Reserve Bank of India decided to maintain status quo with the interest rate trajectory. The repo rate and the cash reserve ratio remains unchanged at 7.5% and 4% respectively. The central bank has opted to take a pause after hiking interest rates twice this year. RBI is buying time to assess the inflationary pressures and the impact of the unseasonal rains this year on food prices.
Banks with weak balance sheets are buffering their margin to overcome high provisioning requirements from elevated asset quality stress. The central bank has expressed displeasure on the absence of monetary policy transmission so far and thus to make it more effective RBI would be encouraging banks to move in a time-bound manner to marginal-cost-of-funds-based determination of Base Rate. The detailed guidelines on the same are expected to be issued shortly.
The outlook for growth is improving gradually, according to RBI. Going ahead, the key triggers that would accelerate growth would be the initiatives announced in the Union Budget to boost investment in infrastructure and to improve the business environment, start of the Base Rate reduction cycle by banks given comfortable liquidity conditions and benign outlook on inflation, delivering lower input cost advantages to corporates. The central bank has projected FY16 growth at 7.8%, 30bps higher than 7.5% in FY15, assuming a normal monsoon, continuation of the cyclical upturn in a supportive policy environment and no major structural change or supply shocks.
In the longer horizon, performance of monsoon, government’s policy efforts towards unclogging supply bottlenecks and US monetary policy would also be the key determinants. Overall, we maintain our view that further 75-100bps repo rate cut is possible in the current calendar year.
Nifty 50 companies would disappoint shareholders and creditors with lacklustre growth in sales and profits for the March 2015 quarter, according to estimates by the ET Intelligence Group.
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