The Indian stock market rose ahead of the RBI bi-monthly monetary policy decision. At the time of writing this copy, Sensex was up 206.55 points or 0.55 percent at 37869.88, and the Nifty jumped 62.20 points or 0.56 percent at 11163.90.
It is widely expected that the RBI will either cut the key rates or keep them steady, amid rising inflationary pressure and a grim economic outlook.
Around two-thirds of economists expect the central bank to cut the repo rate by another 25 bps, according to a Reuters poll.
“We anticipate an asymmetric cut of 25 basis points in the repo rate and 35 basis points in the reverse repo rate in August 2020, in a split decision from the MPC,” said Aditi Nayar, Principal Economist at ICRA.
In May, the MPC cut the repo rate by 40 bps to 4 percent, maintaining its accommodative policy stance. So far in 2020, the MPC has already slashed the repo rate by 115 bps amid the COVID-19 outbreak and consequent economic fallout.
Bank Nifty is trading in the green, up half a percent led by HDFC Bank, IndusInd Bank, Kotak Mahindra Bank, ICICI Bank and State Bank of India.
The auto index was trading in the red with Mahindra & Mahindra, Maruti Suzuki and Eicher Motors were down a percent each. Motherson Son Sumi, TVS Motor and Hero MotoCorp were the other losers.
Nifty Financial Services was trading in the green led by Bajaj Finance, Bajaj Finserv, Bajaj Holdings, HDFC, ICICI Prudential, Mahindra & Mahindra Financial, REC and SBI Life Insurance.
Among the real estate names, Oberoi Realty jumped 3 percent while Prestige Estates, Sobha, DLF and Phoenix Mills were the other gainers.
Shishir Baijal, Chairman & Managing Director, Knight Frank India also said he hopes the MPC will reduce the key policy rates.
“With Indian economy still grappling with COVID-19 crisis and prevalent demand concerns, especially in residential real estate, we hope that RBI will further cut policy rates by another 50 bps,” Baijal said.
