Equity extended gains as the policy rates hike by RBI came in on expected lines. The Nifty too hit the 5800-mark but more than half of the gains immediately got wiped out after the central bank's forecast about GDP growth and inflation.
Inflation forecast has been revised to 7% from 5.5%, which is likely to moderate in Q1FY12, RBI says. "Policy action will contain spill over to generalised inflation." The bank also says, GDP growth rate may decline in FY12.
The RBI upped repo, reverse repo rates by 25 bps each to 6.5% & 5.5%, respectively. Even 1% SLR leeway has been extended till April 8.
Experts believe that the RBI will continue with raising rates going forwards. Nomura said, "Rate hikes likely in coming policy reviews."
C Rangarajan, chairman of the Prime Minister's Economic Advisory Council said RBI has taken the right decision. He expects RBI to continue with raising rates going forward.
Bankers like Bank of Baroda and IndusInd Bank said they might consider lending rate hike.
The BSE Bankex was down 0.2% which rallied nearly 1% on announcement of rate hikes. SBI, HDFC and Kotak Mahindra Bank were up 0.65-1% while ICICI Bank tanked 1.5% and PNB fell 0.8%. Axis Bank and HDFC Bank were marginally in red.
The 30-share BSE Sensex was trading at 19,208, up 57 points and the 50-share NSE Nifty went up 18 points to 5,762. About 738 shares advanced as against 526 shares declined on National Stock Exchange.
Power, capital goods, FMCG, telecom, metal and technology companies' shares were quite supportive. Even oil marketing companies' were on buyers' radar as they are likely to get subsidy soon, according to sources. BPCL rallied 4.6%.
In midcap space, BF Utilities, Money Matters, Shriram City, eClerx Services and Emami gained 4-7% while Simplex Infra, BOC India, SKS Microfinance, Raymond and Apollo Hospital fell 2.5-4.5%.
In smallcap space, Hercules Hoists, Century Enka, Dion Global, Sahara One and Zenith Infotech jumped 7-10.7% whereas Balkrishna Inds, Centrum Finance, Premier, Lloyds Metals and Sanghi Inds lost 3.6-5%.
Inflation forecast has been revised to 7% from 5.5%, which is likely to moderate in Q1FY12, RBI says. "Policy action will contain spill over to generalised inflation." The bank also says, GDP growth rate may decline in FY12.
The RBI upped repo, reverse repo rates by 25 bps each to 6.5% & 5.5%, respectively. Even 1% SLR leeway has been extended till April 8.
Experts believe that the RBI will continue with raising rates going forwards. Nomura said, "Rate hikes likely in coming policy reviews."
C Rangarajan, chairman of the Prime Minister's Economic Advisory Council said RBI has taken the right decision. He expects RBI to continue with raising rates going forward.
Bankers like Bank of Baroda and IndusInd Bank said they might consider lending rate hike.
The BSE Bankex was down 0.2% which rallied nearly 1% on announcement of rate hikes. SBI, HDFC and Kotak Mahindra Bank were up 0.65-1% while ICICI Bank tanked 1.5% and PNB fell 0.8%. Axis Bank and HDFC Bank were marginally in red.
The 30-share BSE Sensex was trading at 19,208, up 57 points and the 50-share NSE Nifty went up 18 points to 5,762. About 738 shares advanced as against 526 shares declined on National Stock Exchange.
Power, capital goods, FMCG, telecom, metal and technology companies' shares were quite supportive. Even oil marketing companies' were on buyers' radar as they are likely to get subsidy soon, according to sources. BPCL rallied 4.6%.
In midcap space, BF Utilities, Money Matters, Shriram City, eClerx Services and Emami gained 4-7% while Simplex Infra, BOC India, SKS Microfinance, Raymond and Apollo Hospital fell 2.5-4.5%.
In smallcap space, Hercules Hoists, Century Enka, Dion Global, Sahara One and Zenith Infotech jumped 7-10.7% whereas Balkrishna Inds, Centrum Finance, Premier, Lloyds Metals and Sanghi Inds lost 3.6-5%.
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