Bank stocks in action after RBI hikes repo rate to 5.4%

5 Aug 2022 , 10:29 AM

The bi-monthly meeting of the RBI MPC started on Wednesday (August 3), and RBI Governor Shaktikanta Das on Friday (August 5) announced that the MPC unanimously decided to hike the policy rate. The MPC decided that the SDF rate would stand adjusted to 5.15% and MSF rate and bank rate at 5.65%. The MPC will continue to remain focussed on withdrawing accommodative policies to ensure inflation remains within target while supporting growth,? the Governor said. He further said that Indias consumer price inflation has eased from its surge in April but remains uncomfortably high and above upper threshold of target, says RBI governor. Inflationary pressures are broad-based and core inflation remains at elevated levels. Inflation expected to remain above the upper threshold in Q2 FY23 and Q3 FY23, adding that a calibrated withdrawal accommodation is warranted. The Reserve Bank of India has retained its FY23 GDP growth forecast at 7.2% with Q1 GDP growth at 16.2%, Q2 at 6.2%, Q3 at 4.1%, Q4 at 4%. The Indian economy is likely to grow at 6.7% in Q1 FY24. Following the rate-hike announcement, the Nifty Bank index advanced 0.70% to 38,019.05 while the benchmark Nifty 50 index rose 0.33% to 17,439.70. ICICI Bank (up 1.41%), IDFC First Bank (up 1.05%), State Bank of India (up 0.9%), Federal Bank (up 0.79%) and Axis Bank (up 0.7%) advanced. Further, AU Small Finance Bank (up 0.51%), Punjab National Bank (up 0.3%), Kotak Mahindra Bank (up 0.28%), Bank of Baroda (up 0.25%) and HDFC Bank (up 0.05%) edged higher. Meanwhile, IndusInd Bank (down 0.18%) and Bandhan Bank (down 0.18%) edged lower. In the bond market, the yield on Indias 10-year benchmark federal paper rose 1.27% to 7.248 as compared with 7.157 at close in the previous trading session. In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 79.0975, compared with its close of 79.4000 during the previous trading session. It had hit a high of 79.1700 and a low of 78.9400 so far in todays trading session. Powered by Capital Market – Live News