Stocks to buy after RBI monetary policy: The Reserve Bank of India (RBI) kept the repo rate unchanged at 6.50% for the seventh consecutive Monetary Policy Committee (MPC) meeting. However, stock market experts see the RBI move as an opportunity for long-term investors who want to buy banking and financial stocks. They said RBI keeping repo rates unchanged would mean there would be no cheaper money for lenders, which could lead to some correction in these stocks. However, they argued that the Indian economy is pegged to global goods and the US Fed has already declared three interest rate cuts in 2024. As such, the RBI appears to be waiting for the first US Fed rate cut of the year to provide more clarity on interest rates. Cut the timeline. They advised medium to long-term investors to consider adding or accumulating in five banking and financial stocks: State Bank of India (SBI), HDFC Bank, IRFC, Poonawalla Fincorp and Bajaj Finance.
Impact of RBI monetary policy on stock market
Commenting on how RBI's monetary policy will impact the Indian stock market, Anil Rego, Founder and Fund Manager, Wright Horizons, said, “Short-term markets will be affected by the upcoming earnings season and the 2024 elections.'' “We think it's going to move. Investors are bullish because investors are bullish.” The banking sector is the most sensitive to changes in the interest rate cycle, benefiting from interest rate hikes and credit expansion, which was the main reason for the increase in profits in FY23 and H1 FY24. Be strong and tenacious. ”
“While a prolonged period of rate cuts will ultimately lead to a contraction in NIM, we expect rate cuts to start in the last quarter and hence the trend in the banking sector is likely to continue in FY24. “Banks will be in the best position to benefit from rate cuts. Banks will be the ones that will improve. Demand will also rise in credit-sensitive sectors such as autos and real estate,” Anil Rego added.
“From a stock market perspective, the announcement is likely to have an impact on investor sentiment and market trends. “Monetary policy measures could further boost investor confidence and increase stock market upward momentum.'' Any accommodative signs could have some impact.'' “However, concerns over inflation and global economic risks could dampen market gains. The banking sector could benefit from RBI's focus on liquidity management,” founder Sonam said.・Mr. Srivastava said. Fund manager of Wright Research.
RBI Monetary Policy: Stocks to buy today
Sandeep Pandey, founder of Basab Capital, took a positive view on banking and financial stocks after the RBI's monetary policy meeting, saying, “RBI's decision to keep reporting rates unchanged means additional investment for Indian lenders.'' “This could mean a lack of liquidity, which could cause some downside pressure on banking and financial stocks.” financial stocks. I think the Indian central bank is waiting for the first rate cut announcement from the US Federal Reserve to get more clarity on global inflation. However, the US Federal Reserve has already announced three rate cuts in 2024, which is expected to influence the RBI's stance. The same goes for interest rates. So if there's a correction in high-quality banking or financial stocks, you should pay attention to those stocks.”
Asked about the stocks to buy today following the outcome of RBI's monetary policy meeting, Basab Capital founder and former vice president of HDFC Bank said, “These five banking and financial stocks (SBI, HDFC Bank, IRFC, Poonawalla)・Fincorp and Bajaj Finance.
Disclaimer: The views and recommendations expressed above are those of individual analysts, experts, and brokerages and not of Mint. We recommend checking with a certified professional before making any investment decisions.
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