RBI policy: Stock market experts suggest ‘buy on dips’ strategy in these sectors
Ahead of the announcement of Reserve Bank of India (RBI) Monetary Policy Committee (MPC) meeting outcome, stock market experts have predicted volatility in interest rate sensitive segments like banking, NBFC, auto, real estate and infrastructure. However, they said that RBI is expected to maintain status quo on interest rate and hence any dip in quality stocks in these segments should be seen as buying opportunity by investors.
Segments to look at
On segments that may trade volatile ahead of RBI policy meeting outcome, On intraday trading strategy in the wake of RBI MPC meeting, Santosh Meena, Head of Research at Swastika Investmart said, “RBI is scheduled to announce its monetary policy on August 10, 2023. Ahead of the policy, rate-sensitive sectors such as banking, NBFCs, real estate, auto, and infrastructure are likely to remain in focus. While the market is expecting a status quo in the repo rate, it will be keen to hear the RBI’s assessment of the inflation trajectory and the outlook for growth. Any hint of a hawkish stance from the RBI could weigh on sentiment in these sectors.”
Stocks to buy today
On stocks that should be in focus of intraday traders and positional investors, Swastika Investmart expert said that stocks like DLF, Godrej Properties, and M&M Finance may remain volatile on policy day.
On segment wise stocks to look at Avinash Gorakshkar, Head of Research at Profitmart Securities said, “Inn auto segment, one can look at Mahindra & Mahindra (M&M) and Tata Motors shares, in banking sector one can look at Bank of Baroda, Punjab National Bank and ICICI Bank shares.”
On why RBI may not raise interest rates in its monetary policy meeting in August 2023, Madan Sabnavis, Chief Economist at Bank of Baroda said, “We do expect a status quo decision by the MPC this time. Inflation while being lower than 5% in June is expected to come closer to 6% in July. The prices of vegetables as well as pulses will continue to exert upward pressure on food inflation. With GDP growth in the first quarter expected to be closer to 8% in the first quarter thus indicating stability. There is, hence, no compelling reason to spur growth presently. Hence repo rate will remain unchanged till end of calendar year. Besides, Fed has indicated possible hike in future and treasury yields have moved up. Further, with liquidity being comfortable stance of withdrawal of accommodation will remain. We expect no change in inflation and GDP forecasts.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 10 Aug 2023, 09:40 AM IST
