RBI policy impact: Banks, realty, NBFCs stocks help Nifty breakout above 9920

Analysts expectations became true. The Reserve Bank of India (RBI) today announced that key interest rates are fixed without any changes to backdrop the rising inflation. RBI governor Urjit Patel held a meeting with six member monetary policy committee (MPC) delegates kept one eye firmly on the rising inflation that is perilously inching towards the RBI’s 4 percent threshold level. The committee decided to continue with six per cent of the repo rate. The reverse repo rate and CRRs have been kept at 5.75 per cent and 4 per cent without any changes. However, SLR was down by 50 basis points to 19.5 per cent.

The RBI estimates that the growth rate will further deteriorate in 2017-18. The Reserve Bank of India has revised the growth rate to 6.7 per cent from its earlier estimate of 7.3 per cent. However, inflation is projected to be 4.2 to 4.6 percent.

As a part of the transition to a Liquidity Coverage Ratio (LCR) of 100 percent by January 1, 2019, it is proposed to reduce the Statutory Liquidity Ratio (SLR) by 50 basis points from 20.0 percent to 19.50 per cent of banks’ net demand and time liabilities (NDTL) from the fortnight commencing October 14, 2017. The ceiling on SLR securities under ‘Held to Maturity’ (HTM) will also be reduced from 20.25 percent to 19.50 percent of banks’ NDTL in a phased manner, i.e., 20.00 percent by December 31, 2017 and 19.50 percent by March 31, 2018

The Sensex opened at a high of 31,537.87 points. The same index continued to be at a high of 31,615.28 points. It ended with a gain of 213.66 points at 31,497.38 points. The Nifty also recovered to 9,800. It had gained 70.90 points at 9,859.50. In intraday, the index moved to 9,831.05-9,895.40 points.

Meanwhile ICICI Bank was in the red, down by 0.5 percent at Rs 277.05. HDFC Bank and Axis Bank were trading lower in the red down by 0.41 percent and 0.49 percent respectively.


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