RBI monetary policy review 2018: Rate sensitive stocks rally up to 9% as RBI signals no rate hike in 2018

Stocks from the rate sensitive sectors such as banking, realty and auto had a strong rally on Thursday after the Reserve Bank of India maintained status quo for the fourth straight time in its first bi-monthly monetary policy review of 2018-19. Nifty Bank, Nifty Realty and Nifty Auto indices rallied up to nearly 3 per cent. Public sector banking stocks outperformed with Nifty PSU Bank (up 4 per cent) being the leading sectoral gainer among NSE indices. Canara Bank (up 9.2 per cent), Bank of India (up 7.7 per cent) and Syndicate Bank (up 6.6 per cent) contributed most to the index. 

Nifty Bank advanced 2.6 per cent, led by gains in Bank of Baroda (up 6 per cent), SBI (up 5 per cent) and ICICI Bank (up 3 per cent). Nifty Bank slipped over 6 per cent since last RBI policy held on February 7, 2018. 

Nifty Auto added 1.8 per cent. Apollo Tyres, Tata Motors DVR and Hero MotoCorp gained the most, up to 3 per cent on the NSE. Nifty Auto remained flat between the last policy and today. 

Nifty Realty, which slipped over 7 per cent since last RBI policy, added 2.6 per cent today. Indiabulls Real Estate, Sobha and DLF were the top gainers and rallied up to 5 per cent on the NSE. 

"There has been consistent improvement in certain macros and important data points like better than expected 3rd quarter GDP, pick up in the manufacturing sector & industrial production, excellent auto sales numbers & pick up in credIt growth. With revised lower Inflation trajectory by RBI, Equity markets were clearly enthused. We have been constantly advising clients to accumulate good quality stocks in a market which has corrected both in terms of valuations & price points. We continue to be bullish on domestic themes where there is good predictability of earnings growth," said Devang Mehta, Head – Equity Advisory, Centrum Wealth Management.