The Reserve Bank of India may raise interest rates by a cumulative 50-75 basis points in the current tightening cycle, according to a Bank of Baroda report. It also highlights strong consumption, mixed tax collections and concerns over rural and urban confidence
Indian equity benchmarks fell in early trade on Wednesday as investors turned cautious ahead of the RBI's monetary policy decision. Sensex dropped 462 points and Nifty declined 176 points, while consumer durables, metals and auto stocks led sectoral losses.
SBI Research has recommended two 25-basis-point RBI rate hikes by December, citing elevated global oil and commodity prices and early signs of inflation generalisation. It warned consumer inflation could approach 6.5 per cent or higher if oil remains elevated.
The RBI kept the repo rate unchanged at 5.25 per cent for a third straight policy meeting, while maintaining a neutral stance. It raised its FY27 GDP growth forecast to 6.7 per cent, lowered the inflation projection to 5 per cent and cited global uncertainties.
The rupee weakened 10 paise to close at 95.29 against the US dollar due to rising crude oil prices, strong dollar demand and foreign fund outflows. Market participants await the RBI policy outcome, with the currency expected to remain range-bound
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Equity benchmarks Sensex and Nifty fell in early trade on Friday ahead of the RBI’s monetary policy announcement. Weak global cues and foreign fund outflows weighed on investor sentiment. Focus remains on interest rate direction and FY26 growth outlook.
At the interbank foreign exchange market, the rupee opened at 83.46 and then slipped to 83.47 against the dollar, gaining 6 paise from its previous close
The six-member Monetary Policy Committee (MPC) of the RBI voted 5-1 to up the policy repo rate by 50 basis points (bps) to rein in the above target inflation
"Going ahead, market is expected to remain positive but with sector/stock specific action. Investors would now track earnings season and watch out for management commentaries."
