Wall Street's main indexes dropped on Thursday, as investors stayed away from making riskier bets owing to a lack of new developments in U.S.-China trade talks.
The three main stock indexes opened higher, extending gains from the previous session, but lost steam in the first hour of trading.
ETMarkets Evening Podcast: How RBI policy move has changed D-Street outlook
Nifty appears to be moving inside the 18-day-old ascending channel, drawn from the high of 12,034 hit on November 8. Unless the lower boundary of the said channel, whose support lies around 11,950 level, is breached, weakness in the index will not get confirmed
ETMarkets Special Podcast: Has RBI rate cut cycle come to an end?
At the current juncture, Nifty is hovering around the lower end of the channel and the 20-EMA on daily chart. On the sectoral front, gains in the IT space got evened out by a corrective move in banking heavyweights. Going forward, Nifty needs to sustain above the 12,000 mark to witness an up-move towards 12,158 and then 12,250 levels. On the flipside, strong support is placed in the 11,935-11,950 zone and then 11,880 level
Market ended marginally lower in the eventful session, in continuation of the prevailing consolidation phase. Participants were in the cautious mood from the beginning ahead of the RBI policy meeting outcome. We expect consolidation to extend further, thus traders should continue with the stock-specific approach. We suggest preferring index majors and keeping positions on both sides. Also, maintaining a close watch on global markets for cues
- Ajit Mishra, VP - Research, Religare Broking
A precautionary pause due to high food inflation and the tepid pace of transmission of previous rate cuts prompted RBI to turn more vigilant on the inflation trajectory. A steep cut in GDP growth forecast to 5 per cent for FY20 seems to be more realistic, and it raises prospects of more government intervention to revive consumption and investments activity
- Vinod Nair, Head of Research at Geojit Financial Services
Given the current economic and temporary inflation scenario, the unchanged policy rate is in line with our expectations. As there has been reasonably high liquidity in the system and limited transmission of the earlier rate cuts, RBI decided to maintain status quo. We expect the private capex to make an entry due to corporate tax cut and banks to start lending aggressively to reduce existing liquidity
- Umesh Revankar, MD and CEO, Shriram Transport Finance
OPEC and its allies led by Russia will discuss on Thursday deepening oil cuts by more than 400,000 barrels per day, two sources from the OPEC+ group of oil producers told Reuters.
The sources said it was the main scenario for discussions on Thursday.
RBI surprised with a unanimous preference for status quo on policy rates, despite observing there was room for a rate cut, due to, as governor stated, slow transmission of earlier rate cuts. The onus clearly shifts to banks, which in our view shall have to hasten transmission on non-repo linked loans
- Ravikant Bhat, Senior Analyst BFSI, IndiaNivesh
The decision to leave rates unchanged is appropriate. Taking a pause at this juncture, after five consecutive rate cuts is justified. So far, repo rate has been brought down 160 basis points (bps) from August 1, 2018, however, demand continues to remain sluggish. The real estate sector is yet to reap out benefits out of it, which is reeling under liquidity pressures. The banks need to pass on the benefits of the previous cuts to the customers and help boost demand
- Ravindra Sudhalkar, ED and CEO, Reliance Home Finance
This is tantamount to an implicit rate hike - premature and unwarranted, in our opinion, because this is a demand-side reaction to supply-side retail inflation. Growth is left unaddressed. At least the saving grace is that no ammunition was expended on piecemeal measures. We still hope that the growth priority prevails and a substantial easing is brought about in the next policy cycle
Banks need to hasten transmission on non-repo linked loans: Ravikant Bhat, IndiaNivesh
A rate cut could have provided much required reprieve to some ailing sectors like real estate and auto: Shishir Baijal, Knight Frank India
Price as on 05 Dec, 2019 02:12 PM, Click on company names for their live prices.
Stronger fiscal stimulus is required to stem this fall without which it could be still lower as we move into the next financial year. Measures to stimulate demand needs to be taken immediately, in the absence of which counter cyclical actions may not bear fruit.
- Joseph Thomas - Head of Research, Emkay Wealth Management
Expect no rate cut till inflation comes back to 4% level: Nikhil Gupta, Motilal Oswal Financial Services
The Chief Economist at Motilal Oswal Financial Services said that he had believed that Thursday' cut (which did not happen) would be the last rate cut in this cycle. "We continue to maintain that there will be no more rate cuts now unless inflation falls back towards 4%. It implies that any rate cut is unlikely in the next one year,” Gupta said.
Do you agree with RBI's contention that sudden spike in inflation calls for pause in policy rate cuts?
RBI’s rate pause and the second successive sharp downward revision of GDP estimate for FY20 have been surprising. More than flare in inflation, lack of transmission of rate cut seems to have been the bigger reason for the rate pause. We, however, expect RBI to resume rate cut in Jan’20. We also expect FY20 GDP growth to be better than RBI’s revised estimate
Forex kitty hits a new high, sniffs at $452 billion
Foreign exchange reserves continue the upward journey surging to a new high of $451.7 billion as of December 3, Reserve Bank governor Shaktikanta Das said on Thursday. Since the beginning of the current fiscal, the forex kitty has gained by $38.8 billion as of December 3, the largest in recent year, the governor added.
Against an almost consensus market expectation of a rate cut based on the slowdown seen in growth, the MPC seems to have chosen to focus on its mandate of inflation management and have recognised that the latest CPI print and expected prints over next few months would be higher than their targeted level and also a belief that past rate cuts will help to support growth with focus on transmission.
- Sudhakar Shanbhag, Chief Investment Officer, Kotak Mahindra Life Insurance
The Reserve Bank of India has kept the policy Repo rate unchanged at 5.15% against the ambitious Street projections of 50 bps. The MPC has specifically mentioned keeping an accommodative stance in the future to revive GDP Growth. We have already seen quite a few rate cuts in the past and going forward we believe that accommodative stance would be maintained. What we need is Credit Growth to pick up as you see there have been 135 bps cut in policy repo rate since Feb-19 but the transmission in the Credit market is sluggish and partial in G-Sec. We need to see transmission happening in Lending Rates across the market. The Union Budget is two months away so we believe we can see certain measures post Budget.
- Mustafa Nadeeem, CEO, Epic Research
Top 50 NBFCs being regularly monitored by RBI: Das
Credit flows to NBFCs slowly reviving, Das added.
It was an unexpected move with the RBI keeping the repo rate unchanged at 5.15 percent, as the market expected 25 bps cut in repo rate. With the RBI following a inflation targeting regime, the Central Bank focused on maintaining the inflation rate within the target range. The rising food inflation posed a challenge to the Central Bank in cutting the rates. However, by maintaining the accommodative stance, there is room for rate cuts in the future
- Deepthi Mary Mathew, Economist, Geojit Financial Services
Don't want to get into discussion on real-interest rate
- RBI Guv
Want clarity on counter-cyclical steps govt announces
- Shaktikanta Das, RBI Guv
The MPC unanimously voted for a status quo on the policy rate, defying the wide expectations of yet another repo rate cut. The pause on the rates is attributed to transient inflationary risks, though the central bank affirms that there is space for policy action. Given the growth-inflation dynamics, we still sense that RBI will deliver a rate cut of 25bps in February policy meeting given the widespread deceleration in the economy. Although RBI is concerned about near-term inflation risks, higher Rabi crop output will assuage the spike in food prices. Benign core-inflation will also persuade RBI to remain accommodative.
- Amar Ambani, Head of Research - Institutional Equities, YES Securities
Rate cut must be done when impact is maximum: RBI Guv
VIX rises 9%
Urban co-op banks with assets over Rs 500 crore to be under RBI reporting framework
- Shaktikanta Das, RBI Guv
Telecom tariff hike may impact inflation
- Shaktikanta Das, RBI Guv
To allow up to $10 million FX derivatives deal without exposure: Shaktikanta Das
There is a need to optimize the impact of rate reductions: Shaktikanta Das
RBI has finally thrown the ball back in Government’s court to revive the economic engine which has further deteriorated since the last meet. Transmission of interest rates have not happened yet which could be one of the reasons RBI waited to cut rates and nudged the Government and banks to take efforts from their end. Additionally, slightly higher inflationary tendencies might have also led to the pause in rate cut. But, this is a negative for the markets as a rate cut was required to boost risk taking appetite in the economy.
October-March 2020 CPI inflation seen at 4.7-5.1%; April-Sept 2020 CPI inflation seen 3.8-4%
Fall in deposit rate augurs well for loan rate transmission
October CPI print was much higher than expected, says MPC
Delay in domestic demand revival is a key downside risk to GDP
MPC expects inflation to rise in the near term
MPC sees need to address impediments holding back investments
FY20 real GDP growth projection lowered to 5% from 6.1%
Stance to remain accomodative as long as required: MPC
MPC recognises there is monetary policy space for future
RBI keeps repo rate unchanged
Zydus Cadila files NDA for Saroglitazar Magnesium
Price as on 05 Dec, 2019 11:28 AM, Click on company names for their live prices.
Well, MPC really has no other alternative, simply because if it did not do it, the consequences, at least in terms of sentiment would be adverse, knowing full well that a typical 25 bps cut would make no difference at all. So perhaps a 25 bps cut will be there. But Shaktikanta Das is dovish and much more willing to take the bull by the horns. If he were to exercise his veto power and say we need to do more, who knows, maybe some relatively unconventional measures like longer term OMOs, a CRR cut which has not even been talked about, could be tried and that would have more effect in terms of transmission.
- Mythili Bhusnurmath
HDFC AMC falls nearly 5% as OFS kicks off for retail investors
Shares of HDFC Asset Management Company slipped over 4 per cent in the morning trade on Thursday as the offer for sale by one of its promoters kicked off for retail investors.
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