Hike service

Impact of rising RBI repo rate on equity market: Nifty Bank, financial services stocks gain – IDFC First Bank top earner

Expecting a rate hike in August monetary policy, rate-sensitive sectors and equities were in the green on Friday. Specifically, Nifty Bank and Financial Service jumped more than 0.7 and 0.6 percent, respectively, minutes after the Governor of the Reserve Bank of India (RBI) announced a 50 basis point rate hike. . A basis point is one hundredth of a percentage point.

Das, while announcing that the Monetary Policy Committee (MPC) had unanimously decided to raise the repo rate to 5.4%, the third consecutive hike amid soaring inflation, said the MPC had also decided to remain focused on withdrawing accommodation to ensure inflation remains within bounds. the goal in the future while sustaining growth.

Stocks like ICICI Pru Life gained more than 3%, followed by Chola Investment and Muthoot Finance, up almost 3% from the financial pack, while IDFC First Bank became the top gainer in Nifty Bank, up by more than 2%, followed by ICICI. Bank up more than 1.5 percent on the NSE intraday.

Heavyweights such as State Bank of India (SBI) and HDFC Life also jumped more than 1% on the NSE intraday among financial stocks. While Bajaj Finance, HDFC Bank and HDFC AMC were up slightly.

By comparison, the Nifty50 index rose nearly 58 points or 0.33% to 17,439.7 levels and the Sensex rose more than 255 points or 0.44% to 58,554.27 at around 11:00 a.m. Friday.

Several analysts had predicted that the RBI’s MPC would likely raise key interest rates in the range of 35 to 50 basis points (bps) with less hawkish comments during August’s fortnightly policy.

Notably, June marked the sixth consecutive month that inflation came in at 7.01%, above the RBI’s upper tolerance level.