RBI keeps repo rate steady, maintains neutral stance

RBI keeps repo rate steady, maintains neutral stance”

Reserve Bank of India (RBI)'s move on monetary policy steered the trajectory of Indian market on Wednesday, with equities suffering for the second straight session.

Going forward, several analysts expect the RBI to keep rates on hold in the coming months, including at its next policy meeting, in February 2018. Key policy rates like the repo rate (that at which the RBI lends to banks when they are short of funds) was left unchanged at six per cent. Weak sentiment hovered over realty and automobile counters too.

Keeping one eye on inflation and rising global headwinds, the Reserve Bank of India (RBI) on expected lines made a decision to keep rates on hold for now in its fifth Bi-monthly monetary policy statement released on Wednesday.

At 0610 GMT, the S&P BSE Sensex dropped 0.33 percent at 32,694 while the broader NSE Nifty declined 0.44 percent to 10,074.

Canara Bank is now trading at Rs362, down by Rs11.3 or 3.03% from its previous closing of Rs 373.3 on the BSE The scrip opened at Rs370 and has touched a high and low of Rs373.4 and Rs361.15 respectively. "But given that interest rates are unlikely to reduce at least in the near to medium term, rate-sensitive stocks slid due to rising oil prices and concern over fiscal slippage", Geojit Financial Services Head of Research Vinod Nair said.

In sync with overall trend, the rupee too weakened to quote at 64.55 against the dollar intra-day.

Other losers included Tata Steel, NTPC, Dr Reddy's, ONGC, Power Grid, Bajaj Auto, L&T, M&M, Asian Paints, HDFC Bank, HUL, Lupin, Coal India, ITC, Tata Motors, Axis Bank, Maruti Suzuki and Infosys, falling by up to 1.71 per cent.

In a stimulus package aimed to boost flagging economic growth, create jobs and increase credit flow, the cabinet, in October, approved a Rs 2.11 lakh crore recapitalisation plan for state-run banks and massive road infrastructure investment of almost Rs 7 lakh crore over five years. Japan's Nikkei fell 1.97%, Hong Kong's Hang Seng shed 1.63% while China's Shanghai Index was down 0.29%, extending a retreat across Europe and NY.

The mid-cap index shed 0.89% and small-cap declined 0.66%. London's FTSE rose 0.16% in late morning deals.

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