RBI hikes repo rate by 25 basis point - Stock Market Pulse

Surprise repo rate hike by RBI

RBI (Reserve Bank of India) today surprised by hiking the repo rate by 25 basis points to 8% from 7.75%. However it said, if the consumer price inflation eases as projected it does not anticipate further near-term tightening.

The RBI also hiked the marginal standing facility rate by 25 basis points to 9% from 8.75%. However it kept the cash reserve ratio rates unchanged at 4%.

The policy decision was motivated by an expectation that CPI (consumer price index) inflation will remain high. This indicates that the RBI considered a recent policy rate decision on CPI target.

Bonds, stocks and the rupee tumbled after the policy rate hike. But it soon recovered most losses on the back of the pacifist statement. The benchmark 10-year bond yield which rose as much as 9 basis points following the hike, retreated entirely to continue trading down 5 bps on the day at 8.72%.

The CPI eased to a three-month low of 9.87% in December but still remains well above the RBI's policy repo rate of 7.75%. The RBI had said on Tuesday that CPI inflation risks remain to the upside. It also said that the CPI inflation is likely to stay above 9% during the fourth quarter of the fiscal year ending on March 2014. And also predicted ranging between 7.5% - 8.5% for the quarter that ends in March 2015, "with the balance of risks tilted on the upside."

RBI hikes repo rate by 25 basis point
http://www.stockmarketpulse.net/2014/01/28/rbi-hikes-repo-rate-25-basis-point/

Market Pulse - 6 Aug, 2013

Markets slumped, amid weakening Rupee and concerns of the RBI (Reserve Bank of India) would announce new measures to cap the liquidity in an attempt to avoid further fall in the Rupee. The S&P BSE Sensex dropped down by 449.22 points, or 2.34% to 18,733.04 while CNX Nifty index tumbled by 143.15 points, or 2.52%, to 5,542.25.

Among the sectoral indices, Consumer Durables index was the top loser felling down by 5.60% followed by Realty, Bankex, Metal, Capital Goods, Oil and Gas, Power, FMCG and Healthcare indices down between 1-4.6% each. In the broader market, the BSE Mid-cap and Small-Cap indices were down 1.8-2.6% each.

Among the index losers were, HDFC Bank and ICICI Bank were among the top Sensex losers which ended down over 4% each while HDFC ended down 5.9%. SBI eased 2.5%. Reliance Ind down by 2.4%, ITC slipped by 1.70%, Bajaj Auto ended down by 3.50%, Tata Powercrashed by 14.80%. Other Sensex losers include, Bharti Airtel, L&T, ONGC, and Hindustan Unilever.

The Rupee hit an all time low of 61.80 today as the liquidity tightening steps taken by RBI (Reserve Bank of India) since July 15 2013 failed to sustain the currency. The rupee was trading at Rs 61.03/05 per dollar at 16:45 after.

Tata Power slumped down by 14.80% after reporting worse and unexpected net loss of Rs 115 crore for the quarter ended Jun 2013, amid higher finance costs and foreign exchange losses.

Engineers India ended lower by 6.90% after company reported a decline in its net profit by 16% y-o-y (year-on-year) for the quarter ended June 30, 2013 at Rs 129 crore, amid fall in the operational income, compared to Rs 154 crore profit in a year ago quarter.

The overall Market breadth was firm weak with 1,599 shares as losers compared to 655 shares as gainers on the BSE.

Market Pulse - 24 Jul, 2013

Markets closed down by over 1%, snapping its five-day winning streak, amid a sell-off in banking sector shares after the Reserve Bank of India (RBI) late Tuesday imposed fresh restrictions on commercial banks' access to cash. The Sensex ended down 211 points at 20,091 and the Nifty slipped 87 points to close at 5,991.

The Bankex was the top loser among the sectoral indices on the BSE, down 4.6% followed by Capital Goods, Metal, COnsumer Durables, Power, Auto and FMCG indices. In the broader market, the BSE Mid-cap and Small-cap indices ended down 1.4-1.8% each.

Allahabad Bank, Corporation Bank, Dena Bank, Federal Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab and Sind Bank, Union Bank of India and Untied Bank of India are quoting at their 52-week lows. Most of these banks ended down 3-8.5%, among private banks ICICI Bank, HDFC Bank and HDFC ended down 3-3.7% each while Yes Bank, IndusInd Bank and Kotak Mahindra Bank ended down 5-12% each. Other losers include Hindustan Unilever, L&T and Mahindra & Mahaindra.

Banking shares were hammered which including State Bank of India (SBI), Punjab National Bank, Canara Bank and Bank of India ended down 3-8% after the Reserve Bank of India (RBI) imposed more measures to tighten liquidity to stabilize Indian rupee.

On Tuesday, the RBI has capped the total quantum of funds available under liquidity adjustment facility (LAF) to 0.5% (lowered from 1%) of individual bank’s net deposits and time liabilities (NDTL), which would be effective from July 24, 2013. The earlier imposed cap on overall allocation of funds at Rs 75,000 crore under LAF stands withdrawn. It has also increased the requirement of minimum daily cash reserve ratio (CRR) maintenance to 99% from 70%, which would be effective from first day of fortnight beginning July 27, 2013.

Market breadth was weak with 1,525 declines and 773 advances on the BSE.