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    Top rate sensitive stocks to track post the RBI policy review

    Synopsis

    The S&P BSE PSU index was trading 2% lower, followed by the BSE Realty index which was down 2.1%, while the BSE Banking index plunged 0.4%.

    The central bank further added that cash tightening steps taken recently are likely to be rolled back in a calibrated manner as stability gets restored in the FX market.

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    NEW DELHI: The Indian markets came under pressure in the afternoon trade on Tuesday after the Reserve Bank of India (RBI) left key interest rates unchanged as it supports a battered rupee.

    The 50-share Nifty index reversed gains and slipped below its crucial psychological support level of 5800 in the afternoon trade for the first time since July 8th (intraday).

    The central bank further added that cash tightening steps taken recently are likely to be rolled back in a calibrated manner as stability gets restored in the FX market.

    The RBI left its policy repo rate at 7.25 percent, but took a dovish tone as it slashed its growth forecast of the economy to 5.5 per cent for the fiscal year, from 5.7 per cent previously. Reacting to the news, the rupee fell to 59.64 or 0.39 per cent against the US dollar.

    Rate sensitive stocks, which rallied after the RBI announcement, reversed all of their gains and both Bank Nifty and BSE Banking Index turned red after rallying nearly 1 per cent in trade post the announcement.

    Most of the stocks in rate sensitive sectors pared gains and were trading with sharp losses. The S&P BSE PSU index was trading 2 per cent lower, followed by the BSE Realty index which was down 2.1 per cent, while the BSE Banking index plunged 0.4 per cent in the afternoon trade, at 12:40 pm.

    In the banking pack, IndusInd Bank was trading 2.3 per cent lower at Rs 404.10, followed by Canara Bank which was down 2.05 per cent, Punjab National Bank plunged 1.6 per cent to Rs 574.60 and Yes Bank slipped 1.2 per cent to Rs 358.90.

    In the realty pack, Peninsula Land was trading 6.6 per cent lower at Rs 35, followed by DLF, which was down 3.6 per cent to Rs 162.85, Unitech plunged 2 per cent to Rs 16.80 and HDIL slipped 2.6 per cent to Rs 34.60.

    Bajaj Auto, Ashok Leyland, MRF and Tata Motors were top losers in the auto space with losses of over 2 per cent each.

    We have collated views and recommendations from various analysts on rate sensitive stocks to track post the RBI policy review:

    Analyst: Vinit Pagaria, Senior Vice President - Investment Strategies at Microsec Capital:

    DLF (BUY - CMP: 162.50: SL: 160 Tgt1: 165 Tgt2: 168)

    DLF has corrected sharply and is standing close to its support level of Rs 161. With RBI not changing repo rate and CRR, a pull back might take the stock higher up to Rs 165 followed by Rs 168.



    Yes Bank (BUY – CMP: 366.50 SL: 362 Tgt1: 371 Tgt2: 378)

    Yes Bank has corrected sharply in the last couple of weeks. The momentum indicators are deeply oversold and a pull back rally can take the stock higher in the extreme short term.

    Axis Bank (BUY – CMP: 1109 SL: 1088 Tgt1: 1124 Tgt2: 1138

    Axis Bank has also corrected significantly in the last few trading sessions and a short covering rally might take the stock higher up to Rs 1140 odd level in the short term.

     
    Analysts: Prakash Gaba, CFT, prakashgaba.com

    DLF: I would like to short 'DLF' which is looking weak to me and can slide down to levels perhaps closer to around Rs 155. It is trading near lows. Traders can keep a stop loss above Rs 167 and trade short.

    Analyst: Mitesh Thacker of miteshthacker.com

    Andhra Bank: Traders can ‘short’ the stock at current levels for a target of Rs 68, keeping a stop loss placed below Rs 75.25.

    Analyst: Gaurav Ratnaparkhi, Technical Analyst Sharekhan

    IndusInd Bank Ltd: Traders can ‘BUY’ the stock with a target price of Rs 430, keeping a stop loss below 403.

    Axis Bank Ltd: Traders can ‘BUY’ the stock with a target price of Rs 1170, keeping a stop loss below Rs 1094.

    L&T Ltd: Traders can ‘BUY’ the stock with a target price of Rs 899, keeping a stop loss below Rs 826.

    IDFC Ltd: Traders can ‘BUY’ the stock with a target price of Rs 118, keeping a stop loss below Rs 109.90.

    Yes Bank Ltd: Traders can ‘BUY’ the stock with a target price of Rs 390, keeping a stop loss below Rs 357.

    (The views and recommendations expressed in this section are the analysts’ own and do not represent those of EconomicTimes.com)
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    3 Comments on this Story

    Manoj Pilania2615 days ago
    Intresting
    Manoj Pilania2616 days ago
    Intresting
    Kassa Financial2617 days ago
    I think the RBI has made it very clear that it can only contain the volatility of the Rupee, it can support the government in growth of the economy but the kick has to come from the government. To me what RBI has done over the last 3 weeks is contain the volatility in the currency, the rupee will continue to depreciate if policy measures are not announced soon. If no measures are announced and we see FED moving out of easing Rupee will depreciate sharply which would result in inflation. Also we must keep in mind that the liquidity tightening by RBI if extended for too long will hurt growth. I think it is high time, something that I have been saying over the last 2 years that industry needs to put its act together and increase efficiency and the government must support efficiency in whatever way it can.

    -By Noted Economist: Mr. Siddharth Shankar, Advisor, KASSA-
    The Economic Times