Rate-Sensitive Stocks React to RBI Policy Review

Following the first bi-monthly review by the Reserve Bank of India (RBI) Governor Shaktikanta Das-led Monetary Policy Committee (MPC) this year, rate-sensitive stocks remained in focus, influencing market movements on Thursday. Post the February 2024 review, benchmark indices experienced a decline, with sectoral indices of rate-sensitive industries trading lower.

At the close of the trading session, several key indices reflected losses: Nifty Consumer Durables slipped by 0.61%, Nifty Bank by 1.76%, Nifty Financial Services by 1.85%, Nifty Realty by 0.69%, Nifty FMCG by over 2%, and Nifty Auto by 1.28%.

Rate-sensitive stocks, which are influenced by changes in interest rates, experienced varied movements in response to the RBI’s policy announcements. Among banking heavyweights, State Bank of India (SBI) surged by approximately six percent, accompanied by advances in Bank of Baroda and Punjab National Bank, while nine stocks experienced declines.

In the Nifty Financial Services category, six stocks advanced while 14 declined. In Nifty Consumer Durables, five stocks saw advancements while 10 recorded declines. Nifty Realty witnessed five advancing stocks against five declining ones. However, in Nifty Auto, all 15 stocks slipped into the red, registering declines of up to 2%.

The market’s reaction to the RBI’s policy review underscores the sensitivity of certain sectors to changes in interest rates, reflecting investors’ perceptions of the economic outlook and monetary policy stance. As market participants assess the implications of the policy decisions, fluctuations in rate-sensitive stocks are likely to continue shaping market sentiment in the days ahead.