RBI stance change to ‘Neutral’ sparks rally in Bank, Auto, Realty stocks | News on Markets
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Illustration: Binay Sinha
Bank stocks after RBI MPC Oct policy meeting today: Bank stocks rallied on Wednesday, rising up to 2.9 per cent, on the National Stock Exchange (NSE). The rise in bank stocks today came after the Reserve Bank of India (RBI) changed the policy stance to ‘Neutral’ from ‘Withdrawal of Accomodation’.
“After evaluating the macroeconomic conditions and future outlook, the Monetary Policy Committee (MPC) decided, with 5 out of 6 members in agreement, to maintain the policy rate at 6.5 per cent,” said RBI Governor Shaktikanta Das in his policy statement on Wednesday.
The Nifty Bank index climbed 1.1 per cent intraday to hit a high of 51,606 on the NSE. Among individual stocks, Axis Bank surged 2.6 per cent, State Bank of India (SBI) 2.9 per cent, Punjab National Bank (PNB) 2.4 per cent, and ICICI Bank 1.7 per cent in the intraday trade.
At 10:27 AM, eight of the 12 Nifty Bank stocks were trading in the green, with gains in the range of 0.15 per cent to 2.6 per cent. On the flipside, IndusInd Bank, AU Small Finance Bank, IDFC First Bank, and Federal Bank were tarding lower by up to 1 per cent.
Financial services, or non-bank finance company (NBFC) stocks were also buoyed by the RBI’s rate decision. Shriram Finance, HDFC AMC, Cholamandalam Investment and Finance Company, Muthoot Finance, Bajaj Finance, LIC Housing Finance, PFC, and Bajaj Finserv were some of the leading NBFC stocks, trading up to 3.8 per cent higher.
The rally comes despite the RBI Governor reiterating his cautious stance on unsecured lending.
“Banks and NBFCs need to carefully assess their individual exposures in unsecured segments. We have observed that some NBFCs are aggressively pursuing growth without proper administration,” he said.
Auto, Real Estate: Other rate sensitive stocks today
Meanwhile, other rate sensitive sectors, including automobile and real estate players were largely higher as well.
The Nifty Realty index was ruling 2 per cent higher at the time of the writing of this report with Phoenix Mills up 5.16 per cent, Lodha trading 3.5 per cent higher, and Mahindra Lifespace Developers 2.4 per cent.
Eight of the 10 real estate stocks were moving higher with only Sobha and Raymond Realty down up to 0.6 per cent.
According to Puri, Q3CY2024 saw average housing prices rise by a cumulative 23 per cent in the top 7 cities even as average prices in these markets collectively rose to approx. Rs 8,390 per sq. ft. by Q3CY24-end, from approx. Rs 6,800 per sq. ft. in Q3CY23.
Housing sales also declined to an extent in Q3CY24, even as prices rose. As per ANAROCK data, Q3 saw residential sales go down by 11 per cent annually against Q3 of CY-2023. New launches also fell by 19 per cent in this period.
The Nifty Auto stocks, too, were mostly higher with 11 of the 15 index stocks in green. This was led by Exide Industries, Tata Motors, TVS Motor Company, Bosch, and Apollo Tyres.
First Published: Oct 09 2024 | 10:51 AM IST
