India stocks trim losses after RBI rate hike as financials reverse declines
The Reserve Bank of India increased its benchmark repo rate by 25 basis points to 5.5%, shifting its policy stance to "calibrated tightening" due to growth and inflation risks. Financial and bank stocks reversed earlier losses, with private banks rising 0.2% and state-owned banks gaining 1%.
2%, state-owned banks gain 1% Lack of more liquidity-draining steps soothed worries around funding costs and margin, analysts said (Updates levels, adds analyst comments) By Bharath Rajeswaran Oct 7 (Reuters) — Indian shares trimmed losses on Wednesday as financial stocks reversed early declines after the RBI hiked rates by an expected 25 basis points and stayed away from additional measures to drain liquidity. 5%, its first hike since early 2023, and also changed its policy stance to "calibrated tightening" citing growth and inflation risks from higher oil prices and global monetary policy tightening. m. IST.
7% ahead of the rate decision. "A rate hike is not necessarily negative for banks: many private bank loans are directly linked to the repo rate, so lending rates reprice quickly," said Nirav Karkera, head of research and fund manager at W by Groww. "Private banks may see some near-term margin pressure from the large foreign currency deposit inflows, but this should ease as advances pick pace. PSU banks are better placed on margins near term," Karkera said.
7%, respectively, logged ahead of the policy decision. 2% and 1%, respectively. The lack of further liquidity-tightening measures also eased concerns over funding costs and near-term margin pressure, said two analysts. Twelve out of 16 major sectors logged losses.
3%. 8% and 1%, respectively. Shares of Titan fell about 4%, with analysts flagging weaker-than-expected growth in the firm's jewellery segment. 4 as storm risks to US oil output and Houthi attacks on Saudi Arabia outweighed increased Middle East supply.
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