Rate-sensitive stocks mixed after RBI slashes CRR, cuts GDP forecast

Rate-sensitive sectors showed a mixed reaction to RBI announcements on December 6, after Governor Shaktikanta Das announced a status quo on key lending rates while reducing the cash reserve ratio (CRR)—a portion of cash that commercial lenders are required to keep with the central bank—by 50 basis points to 4.5 per cent. The RBI Governor mentioned that the CRR move is expected to infuse Rs 1.6 lakh crore of liquidity into the banking system, implemented in two tranches of 25-bps each.

The Nifty Bank index edged up 0.3 per cent, buoyed by hopes of improved liquidity post-CRR cut. Auto stocks also gained 0.3 per cent, driven by optimism over improved credit availability for consumers. However, the Nifty Realty index dropped 0.6 per cent, as higher borrowing costs continued to weigh on investor sentiment in the sector.

This is only the second CRR reduction in four years, with the previous one occurring in March 2020 to combat pandemic-induced liquidity constraints. By lowering the CRR, the RBI aims to balance liquidity while maintaining its "neutral" policy stance amid persistent inflationary pressures.

Here's how major stocks from rate-sensitive spaces like banking and real estate fared at around 11 am: 

Financial services

Auto

Real estate

Consumer Durables

While the repo rate remains unchanged, reflecting the MPC's cautious approach, the CRR cut is seen as a step toward stimulating economic activity.

The RBI also revised its FY25 GDP growth forecast downward to 6.6 per cent from 7.2 per cent, citing inflationary and geopolitical headwinds.

Investors are closely watching how these measures will impact sectoral dynamics, with banks and autos likely to benefit in the near term, while real estate may face headwinds.