The RBI's Monetary Policy Committee, as expectedly, maintained the repo rate unchanged at 6.5 percent and remained focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.
The Reserve Bank of India held the full fiscal year growth forecast and inflation estimates at 7.2 percent and 4.5 percent, respectively, however, it revised GDP growth estimates for Q1FY25 downwards to 7.1 percent from 7.3 percent earlier, and CPI inflation forecast upwards to 4.4 percent from 3.8 percent earlier for the June FY25 quarter. The central bank still sees higher risks from volatile and elevated food prices, which may adversely impact inflation expectations and result in spillovers to core inflation, although there are also indications of core inflation bottoming out.
In the last reading i.e. for June, CPI inflation jumped to four-month high of 5.08 percent, against 4.75 percent in the previous month on higher food inflation. In fact, the food inflation stayed above 8 percent mark for the eighth consecutive month. This clearly indicates that the rates are likely to remain higher for longer, at least till the inflation consistently aligns to the 4 percent target on a durable basis.
Hence, the MPC reiterates the need to continue with the disinflationary stance, until a durable alignment of the headline CPI inflation with the target is achieved.
"This is in continuity with the stance of the governor and our expectations. This is what the markets have been expecting so I don’t see the interest rate decision moving markets," Divam Sharma, Founder and Fund Manager at Green Portfolio said.
By maintaining the status quo, RBI is keeping up with its stance of balancing inflation and growth. It’s a positive thing that India, as an economy is able to stay relatively less affected by global cues, he believes.
According to Puneet Sharma, CEO and Fund Manager at Whitespace Alpha, the Governor's hawkish tone suggests that a rate cut in the near future is less certain, reflecting a cautious stance in the face of inflationary risks. This decision reinforces the RBI's strategy of cautious optimism, aiming for a stable and sustainable economic environment, he said.
The benchmark indices remained lacklustre after the RBI policy, while among rate sensitive sectors, Nifty Bank and Nifty Auto traded half a percent higher but Nifty Realty index was marginally down, at the time of writing this article.
The Nifty 50 was up 5 points at 24,303, and the BSE Sensex gained 16 points at 79,484, while the Nifty Midcap 100 and Smallcap 100 indices rose half a percent each.
Moneycontrol collated a list of top 9 rate sensitive stocks from experts with a 3-4-week perspective. The stock price of August 7 is considered for the calculation of returns:
Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors
Bajaj Finance | CMP: Rs 6,637
Strategy: Buy
Target: Rs 7,300, Rs 7,600
Stop-Loss: Rs 6,200
Axis Bank | CMP: Rs 1,136.80
Axis Bank is at important juncture. We can see the stock has shown impulsive down move consisting of 5 waves as per Elliott wave. Post its completion, we can expect upside reversal or short term retracement. As shown on hourly chart, break above Rs 1,160 will indicate that wave v is complete and move towards Rs 1,210 can be expected which is near 38.2 percent retracement level. On downside, important price action support is at Rs 1,110 levels.
In short, long positions can be created on hourly close above Rs 1,160 with Rs 1,110 as stop-loss for a target of Rs 1,210 followed by Rs 1,255 levels.
Strategy: Buy
Target: Rs 1,210, Rs 1,255
Stop-Loss: Rs 1,110
Federal Bank | CMP: Rs 192.70
Federal Bank shows strong impulsive rise with short term retracement in form of wave iv ongoing. Post completion of this we can expect up move to resume in form of wave v. Break above Gap area of Rs 197 will confirm this scenario for a move to Rs 208 levels as per Elliott wave. In short, Federal Bank has important support near Rs 187 levels. As long as same is intact, one can expect a move towards Rs 208 and maintain stop-loss of Rs 187 on downside.
Strategy: Buy
Target: Rs 208
Stop-Loss: Rs 187
Jigar S Patel, Senior Manager - Equity Research at Anand Rathi
Macrotech Developers | CMP: Rs 1,215.5
After reaching a peak near Rs 1,595, Lodha has experienced a significant decline, dropping nearly 450 rupees, which translates to a 28 percent decrease in its price. Currently, the stock has found support at its 200-day Exponential Moving Average (DEMA). Interestingly, a Bullish BAT pattern has emerged precisely at this 200 DEMA support level of Rs 1,218. Given these technical indicators, we recommend taking a long position in the stock within the price range of Rs 1,200-1,220. The potential upside target is set at Rs 1,350, while a stop-loss should be placed at Rs 1,140 on a daily closing basis to mitigate risk.
Strategy: Buy
Target: Rs 1,350
Stop-Loss: Rs 1,140
ICICI Bank | CMP: Rs 1,172.5
At the current juncture, ICICI Bank has found support within its previous breakout range and has maintained this level for the past three sessions. Additionally, an Alternate Bullish BAT pattern has formed on the daily chart precisely within this support zone of Rs 1,165-1,175, making the stock an attractive buy at these levels. This technical setup suggests a strong potential for upward movement. Therefore, we recommend buying ICICI Bank in the price range of Rs 1,165-1,175. The potential upside target is set at Rs 1,220, while a stop-loss should be placed near Rs 1,145 on a daily closing basis to manage risk effectively.
Strategy: Buy
Target: Rs 1,220
Stop-Loss: Rs 1,145
Riyank Arora, Technical Analyst at Mehta Equities
DLF | CMP: Rs 845.65
DLF, with support at Rs 800 and resistance at Rs 900, shows ongoing momentum with an RSI (Relative Strength Index 14) at 51. Wednesday's trading volumes were nearly equal to its 30-day average, indicating the stock's strength. The stock is trading well above important moving averages. A buy at the current market price (CMP) is recommended, with a stop-loss at Rs 800 and a target of Rs 900.
Strategy: Buy
Target: Rs 900
Stop-Loss: Rs 800
Maruti Suzuki India | CMP: Rs 12,371.50
Maruti has support at Rs 12,000 and resistance at Rs 13,000, with an RSI (14) at 45 suggesting potential momentum pickup. Wednesday's session volumes were nearly the same as the 30-day average, showing robust trading activity. The stock is trading well above significant moving averages. Buying at the current market price is advised.
Strategy: Buy
Target: Rs 13,000
Stop-Loss: Rs 12,000
Pravesh Gour, Senior Technical Analyst at Swastika Investmart
Mahindra and Mahindra | CMP: Rs 2,680.85
M&M had given a breakout to a Flag formation and surged to an all-time high level of Rs 3,000. However, it has witnessed some profit booking from higher levels and has now retested its breakout level. Level-wise, the first support will be at Rs 2,615, a slip below this could lead to weakness towards the important support of the Rs 2,500. On the upside, the first hurdle is placed around Rs 2,800 level, with the 20 & 50 DMA placed above this. A rally could be witnessed towards Rs 3,000 mark.
Strategy: Buy
Target: Rs 3,000
Stop-Loss: Rs 2,500
HDFC Bank | CMP: Rs 1,623.5
HDFC Bank has created a bottom at its 50 and 20 DMA, forming a lucrative chart structure that could lead the sector from current levels. Technically, Rs 1,570 will be the major support, while on the upside, the first hurdle will be at Rs 1,700 level. Above this, a rally could continue towards its higher zone of Rs 1,800.
Strategy: Buy
Target: Rs 1,800
Stop-Loss: Rs 1,570
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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