For two-wheelers, recovery in the rural market sentiment is crucial and analysts are hopeful that easing inflation should aid in recovery. Most analysts don’t expect any major impact of the rate action on the spending trend of consumers, as the underlying demand for passenger cars remains buoyant and is expected to remain so in the near future. The overall view for this pack is also positive, and the lower hike in rates could boost sentiment for the sector. Given the strong bullish positions across private and public sector banks, RBI’s booster shot could see the sectoral index testing 44500-45000 levels, analysts said. Year-to-date, Nifty Bank has gained more than 22% compared to the 7% gains registered by Nifty 50. The sectoral index has outperformed Nifty 50 by a wide margin in 2022. Shares of banks have been the darlings of D-Street as the strong earnings growth reported by lenders across the spectrum and significant improvement in their asset quality has made them a must “buy” for analysts.Īlong with the Nifty 50, the Nifty Bank also scaled record highs last week. If the RBI’s policy action and commentary are dovish, then the rise of the Nifty 50 to 18800-19000 levels is likely to be driven by rate-sensitive sectors such as automobiles and banks, said analysts. What RBI action means for rate-sensitive sectors?
“We expect a 35 bps hike in the December policy, along with a change in monetary policy stance from “withdrawal of accommodation” to “neutral”, indicating further action to be data-dependent,” said Deepak Agrawal, chief investment officer - debt fund - at Kotak If the rate action is accompanied by a dovish tone of the central bank, it will bolster sentiment and take markets to new highs.
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