Shares of interest rate-sensitive stocks like auto, banking and realty rallied in morning trade on the bourses ahead of the Reserve Bank of India’s monetary policy decision today.
The Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel, will announce the resolution of the MPC on its first bi-monthly monetary policy for financial year 2018-19 later in the day.
Among banking stocks, Kotak Mahindra Bank rose as much as 1.91 % while Yes Bank jumped 2.40 % State Bank of India 2.06 % Federal Bank 2.07 % Punjab National Bank 1.85 % and Bank of Baroda 2.60 %.
The BSE bank index rose 1.75 % to a high of 27417.10 points.
The outcome of the MPC meeting is being keenly awaited by stakeholders amidst pressure on RBI to cut interest rates in the wake of declining retail inflation and the need to fuel growth momentum.
In the realty segment, Godrej Properties gained as much as 1.81 % Prestige Estates Projects 3.71 % Oberoi Realty 2.69 %.
The BSE realty index jumped to 2.55, up 2281.32 %.
In the auto pack, Mahindra & Mahindra advanced by 2.63 % Tata Motors 3.23 % and Bajaj Auto 1.88 %.
The BSE auto index jumped by 1.80 % to 25,333.39 points.
Experts believe the central bank will have to do a tightrope walk as globally interest rates are inching upwards.
Last month, the US Federal Reserve raised interest rates by a quarter of a percentage point and signalled that it is on track to raising rates two more times in 2018.
