D-Street Welcomes RBI’s Monetary Policy; Bank Stocks Rise, Steer Nifty, Sensex

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D-Street Welcomes RBI’s Monetary Policy; Bank Stocks Rise, Steer Nifty, Sensex
Credit: © Reuters.

By Malvika Gurung

Investing.com -- In its monetary policy committee review, the central bank RBI has decided to maintain a status quo on its accommodative stance, for the economy to revive. It has also kept all of its key interest rates, including repo rate, reverse repo rate and bank rate unchanged.

The market has welcomed RBI’s decision to keep the policy interest rate unchanged, as it is still in a recovery mode. 

Benchmark indices rebounded post RBI’s announcements, and banking and financial stocks are on a rise. However, the market is likely to get influenced by the US inflation figures for January 2022 due today, in the short to medium term, stated head analyst at Geojit Financial.

Nifty 50 gained 0.8% to 17,603.75 and Sensex climbed 478 points or 0.82%, at the time of writing.

Motilal Oswal (NS: MOFS ) reads RBI’s decision of holding policy rates as being more focused on domestic macro variables, compared to its global peers, like the Fed which has indicated taking multiple rate hikes in the year. 

NBFC stocks witnessed gains post the review, on RBI’s projection of lower inflation in later FY23, with expectations of less aggressive hikes in monetary policy rates later.

Sectors including banking, financial services and real estate witnessed gains after RBI’s decision of holding key interest rates.

At 1:20 pm, all sectoral indices on the Nifty basket gained, while Nifty FMCG and Nifty Auto remained muted. Nifty Bank rose 1.3%, led by Federal Bank (NS: FED ), Kotak Bank and HDFC Bank (NS: HDBK ), all above 2%, while Nifty Fin Services was trading 1.37% higher.

Nifty Auto and Nifty FMCG were down 0.1% and 0.02%, respectively.

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