Interest Rate Sensitive Indices Trade Firm On RBI's Status Quo Decision

In line with the overall firm momentum on the Indian headline indices with Sensex gaining 850 points at around 12:22 pm, all of the interest sensitive sectors including banking, realty and auto traded with gains.

Interest Rate Sensitive Indices Trade Firm On RBI's Status Quo Decision

In the December 2021 MPC outcome revealed today, RBI as expected continued to keep repo rates unchanged at 4 percent, while maintaining an 'accommodative' stance. Repo rate is the rate at which RBI lends short term funds to banks. Reverse repo and the Marginal standing facility rate has also been kept the same at 3.35 and 4.25 percent, respectively. The announcements come in the backdrop of the rising Omicron variant cases in the country.

Meanwhile, Bank Nifty, Nifty Auto and Nifty Realty traded with gains between 0.9-1.5 percent.

In the 12-scrip Nifty Bank index, all but 1 scrip traded in the green, with major gains of over 2 percent seen in the case of ICICI Bank, SBI and RBL Bank, while Kotak Bank was down by a tad.

Accommodative stance in the monetary policy is suggestive of the fact that the RBI will reduce ongoing rates for infusing liquidity into the financial system as and when needed.

The realty index too was up by over 1 percent with all the scrips within the pack in the green. Sunteck Realty led the list of gainers in the pack.

Likewise, the auto index extended gains and traded higher by over 1 percent. Some of the counters from the pack are trading close to their 52-week low including MRF, Hero MotoCorp, Exide Industries, Bajaj Auto and Amara Raja Batteries.