Rate-sensitive stocks are trading mixed ahead of the Reserve Bank of India (RBI)'s policy announcement slated at noon. Banking stocks are witnessing buying interest and auto stocks are in the negative prior to the RBI Governor Shaktikanta Das' address to the media. The RBI's six-member Monetary Policy Committee (MPC), headed by the RBI Governor, had its 24th and last meeting before the expiry of its current four-year term.
At 10:10 am, in the banking space, HDFC Bank, ICICI Bank, SBI and Kotak Mahindra Bank were trading higher by around 1 per cent each, on the NSE. On the other hand, in the auto space, Maruti Suzuki, M&M and Bajaj Auto had accumulated losses of up to 1 per cent each, on the NSE.
The RBI's six-member Monetary Policy Committee has already met twice outside its bi-monthly cycle, first in March and then in May, on account of the fast-changing macroeconomic situation arising from the coronavirus pandemic.
Economists remain divided over whether the central bank will ease monetary policy further, by reducing the repo rate, despite inflation remaining way beyond its comfort zone. When Governor Shaktikanta Das addresses the media at noon, all eyes will be also on any hints of further monetary easing in the coming months, as well as any clarity on a relaxation in loan EMIs brought in during the coronavirus lockdown.
Analysts also keenly await the RBI's commentary on loan restructuring as a moratorium allowed by it to commercial banks due to the COVID-19 situation comes to an end on August 31. Analysts say loan restructuring is more essential at this juncture as banks have opposed a further extension on concerns over its misuse.
The RBI has already reduced the repo rate by a total of 115 basis points since February, on top of the 135 basis points last year, responding to slowing growth.
The BSE Sensex was BSE Sensex was trading at 37867.75, higher by 201.95 points and the NSE Nifty was at 11165.75, up 64 points or 0.5 per cent at the time.