RBI Monetary Policy: Rate-sensitive stocks mixed ahead of policy outcome

Rate-sensitive stocks were trading mixed ahead of the Reserve Bank of India's (RBI) monetary policy meeting outcome on October 4.

The RBI’s monetary policy committee (MPC) will later in the day come out with its key policy rates. A few market players are expecting a 50 basis points repo rate cut to boost spending in Asia’s third largest economy.

Stocks such as auto, bank and real estate were trading mixed ahead of the outcome.

Among realty, HDIL, Unitech, Sobha Developers and Indiabulls Real Estate were trading 2-5 percent lower, while some buying was seen in the Godrej Properties, Oberoi Realty and DLF in the opening hours.

In the auto space, Tata Motors, M&M, Exide Industries, Ashok Leyland and Amara Raja Batteries under selling pressure, while Bharat Forge, Bajaj Auto, Apollo Tyres, Hero Motocorp, Motherson Sumi and TVS Motor were trading higher.

Federal Bank, ICICI Bank and PNB were among major losers in the banking sector. Gainers included IndusInd Bank, RBL Bank, SBI, Yes Bank and HDFC Bank.

The central bank has already cut the repo rate four times this year, totalling to 110 basis points.

At its previous meeting in August, the MPC reduced the benchmark lending rate by an unusual 35 basis points to 5.40 percent.

Another cut, which is highly likely, will be fifth in a row, as inflation is within the comfort zone and the need to boost the economy is pressing.

RBI Governor Shaktikanta Das has already hinted that benign inflation provides room for further monetary policy easing, while the fiscal space is constrained.