Story of the Day How should investors position their portfolios in light of this decision?
The Reserve Bank of India’s Monetary Policy Committee (MPC) has chosen to keep the policy repo rate steady at 6.5%, marking the fourth consecutive occasion where they have maintained the status quo.
On Friday, Indian benchmark indices opened the session on a positive note and extended their gains as the MPC met market expectations. Moreover, within the benchmark indices, Sensex closed on a higher note by 0.55% above the 65,900 level while Nifty closed higher by 0.55% above the 19,600 level.
Amidst global concerns over rising inflation, crude oil prices, and Treasury yields, the Reserve Bank of India (RBI) has maintained the policy repo rate at 6.5% for the fourth consecutive time. This decision is expected to have no immediate impact on home loans and EMIs.
The RBI Governor emphasized the MPC’s commitment to target an inflation rate of 4%, projecting a moderation in Consumer Price Index (CPI) inflation to 5.2% in the coming year, driven by lower vegetable and cooking gas prices. GDP growth forecasts remain unchanged, with a forecast of 6.5% for Q2FY24, 6.0% for Q3FY24, 5.7% for Q4FY24, and 6.6% for Q1FY25.
In sector performance, Nifty Realty, Nifty Financial Services, Nifty Pharma, and Nifty IT demonstrated strength, emerging as top gainers. Conversely, Nifty Media was the only major sector that showed minimal change.
Among the Nifty50 constituents, Bajaj Finserv, Bajaj Finance, Titan, and IndusInd Bank recorded notable gains, while Hindustan Unilever, Coal India, ONGC, and Asian Paints were among the top decliners.
Also read: RBI Monetary Policy Update – October 2023
In the broader market indices, stocks like Godrej Properties, L&T Finance Holdings, Kalyan Jewellers, and NBCC registered positive movements, while Vodafone Idea, CG Power, MRPL, and Bikaji Foods experienced losses.
Overall, the broader market sentiment remained positive, with approximately 1,306 stocks advancing compared to 712 stocks declining, indicating an overall optimistic market sentiment.