Revising its key policy rates, the RBI has hiked the Cash Reserve Ratio by 0.5% to 6.5%, while the repo rate - the rate at which banks borrow from the RBI, was increased by 0.25% to 7.75%.
As expected and predicted, the markets did not take well to this news, slipping deep into red on sustained selling pressure across scrips – the worst affected being auto, banking and capital good stocks.
Its time to get an expert opinion on the best course of action in such a situation.
Experts like Anil Manghani and Karvy Stock broking think that it is a good idea to buy into bank stocks at this downside. Sajiv Dhawan of JV Capital opines that the market’s reaction was expected.
“The fundamentals have changed with government’s emphasis on controlling inflation and the way they are doing it through interest rates will affect everyone be it a corporate or individual and at some stage that is going go catch up and the problem is that a lot of damage is been done along the way,” he says.
Dhawan feels that equity markets are reflecting that, when you get fixed pauses - maybe next week going up to 11-12% suddenly equities look more risky.
More to come
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