The Reserve Bank of India will hold its bi-monthly policy meet today. Experts expect 25 basis point (bps) cut. But, probability of a 50 bps cut cannot be ruled out, says Vivek Rajpal, Rate strategist at Nomura India.
"I don‘t think the market is range bound it is just pausing after the fall," said CNBC-TV18‘s Consulting Editor Udayan Mukherjee. The market is moving towards 8500 mark, but moves beyond that looks unlikely.
Equity and long bond markets are currently trading at par around 15 times earnings, says Ridham Desai Head of India Equity Research & India Equity Strategist at Morgan Stanley. "If one were bullish on bonds and bearish on equities now is the time to make the swtich," he says in an interview to CNBC-TV18.
"The Reserve Bank will shortly issue Rs 100 denomination banknotes in the Mahatma Gandhi Series-2005, without inset letter in both the numbering panels," RBI said in a release.
A majority of analysts and bankers are expecting RBI Governor Urjit Patel-led Monetary Policy Committee (MPC) to cut rates by 0.25 percent today, with some expecting a 0.50 percent reduction.
A majority of the nearly 60 analysts polled by Reuters predict the Reserve Bank of India (RBI) will cut the repo rate by 25 basis points (bps) to 6.00 percent, the lowest since November 2010, while six predicted a deeper 50 bps cut.
The RBI, guided by the newly-formed six-member monetary policy committee (MPC), is widely expected to cut its key lending rate — the repo rate — by 25 basis points to 6 percent.
There is a high likelihood of a 25 bps cut in the repo rate.
In its report titled '2017 Outlook: Emerging Asia Sovereigns', Fitch said India's growth outlook remains strong on the back of infrastructure spending and the implementation of ambitious reform agenda.
This is the second meeting of MPC headed by RBI Governor Urjit Patel after the first in October, when it had cut repo, or the short-term lending rate, by 0.25 percent to 6.25 percent.
While a 25 basis points interest rate cut is already factored, falling food prices could prompt the Reserve Bank of India to cut rates a second time by 25 basis points, feels Pranjul Bhandari, Chief India Economist at HSBC.
Most economists believe the RBI will cut the repo rate by 25 basis points (bps) to a six-year low of 6.00 percent at a policy review, and follow that with at least one easing next year after the scrapping of high-value bank notes severely curbed consumer demand.
India's economy is forecast to grow 7.5 percent in the financial year through March 2018, according to Deutsche Bank. Goldman Sachs pegged the number higher at 8.6 percent.
The central bank will also conduct an auction of 35 days Cash Management Bills under the MSS for Rs 60,000 crore tomorrow.
Beyond the rate cut call, there are questions which at the current juncture can be very important. Answering these crucial questions will provide some reassurance to the markets and the economy in general.
The Reserve Bank of India (RBI) is set to annouce its bi-monthly policy on December 7. Market and bankers are betting on a 25 basis points reduction in the interest rate.
Almost 70 percent of the people are expecting a 50 bps rate cut by March 2017. Another 75 percent believe that the RBI will lower its gross value added (GVA) guidance to 7-7.5 percent from 7.6 percent due to demonetisation.
According to the global financial services major, the RBI policy committee is expected to take a 'growth-supportive' stance as the government's recent banknote ban has raised downside risks to growth for at least two quarters, beginning the October-December quarter.
When the Reserve Bank of India (RBI) announces its monetary policy later in the day, investors, media and government officials will all train their eyes on a man who is, by all accounts, not fond of the spotlight.
A Reuters poll found the majority of market watchers expected the RBI to keep its policy repo rate - the rate at which it lends to banks - at 6.50 percent, but many expected a 25-basis-point cut by end-December.
The Monetary Policy Committee is billed as the biggest monetary reform measure in a generation.
A Prasanna, Chief Economist, I-Sec PD is of the view that the statements coming out of the Monetary Policy Committee (MPC) today would be dovish even if RBI does not cut rates today.
Irrespective of RBI's decision on interest rates on Tuesday, effective interest rates will fall over the next few months, Nandan Chakraborty, Managing Director, Institutional Equity Research, Axis Capital said. There could be a slight de-rating but index will have an upside of 15 percent on an average, he added.
RBI is operating in an inflation targeting framework and they will decide on rate cuts with an eye on their 4-percent inflation target, says Jahangir Aziz, Asia Economic Research, JPMorgan.
New RBI governor Urjit Patel will present his first monetary policy review on Tuesday. The jury is still out on whether the newly formed six-member monetary policy committee (MPC) will advise an interest rate cut. We take a look at the key factors that will likely guide the panel.