Sensex Trades Rangebound; RBI Cuts Repo Rate

Stock markets in India are presently trading flat. The BSE Sensex is trading higher by 31 points and the NSE Nifty is trading higher by 3 points. Meanwhile, the BSE Mid Cap index and the BSE Small Cap index are trading up by 0.7%.

Among the sectoral indices, healthcare stocks and telecom stocks are witnessing buying interest. While metal stocks and energy stocks are trading in red.

The rupee is trading at 71.58 to the US$.

In the latest development, the Reserve Bank of India has cut the repo rate by 25 basis points in its sixth bi-monthly monetary policy statement for 2018-19.

RBI reduces the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.5% to 6.25% with immediate effect.

The three-day policy review meeting by the Monetary Policy Committee (MPC) began in Mumbai on Tuesday.

The MPC is headed by RBI Governor Shaktikanta Das. In its last bi-monthly monetary policy, the bank had kept the repo rate unchanged at 6.5% and the reverse repo rate at 6.25.

Note that, any hike in the repo rate increases the lending rate in the banks, and vice versa.

RBI has also changed the stance of the monetary policy to 'neutral' from 'calibrated tightening' as inflation being lower than its target for 5 consecutive months.

Actual Inflation has Stayed Below the RBI's Target

Note that, several events have happened in the past few months with inflation reaching a record low and persistent liquidity deficit which are witnessed in the banking system which was supported by the RBI.

Real interest rates in India are among the highest in Asia and calls for the first cut in the policy rate since August 2017 have been growing.

Moving on to the news from IPO space. Chalet Hotels debuted at Rs 291 on the BSE, up by Rs 11 or 3.9% from its issue price of Rs 280.

It touched a high and low of Rs 294 and Rs 250 respectively. So far 4,36,000 shares were traded on the counter.

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To know our view on the IPO of Chalet Hotels Ltd, you can read  more

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