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Markets trade lower after RBI rate hike
Tue, 28 Jan 11:30 am

After opening firm note, the Indian indices are trading below the dotted line in the morning session after the Reserve Bank of India (RBI) hiked he benchmark repo rate by 0.25%. The buying interest is the highest in metal and auto stocks. The selling pressure is the highest in banking and software stocks.

The BSE-Sensex is trading down 40 points and the NSE-Nifty is trading down 18 points. The BSE Mid Cap index is trading up 0.2% and the BSE Small Cap index is trading up 0.3%. The rupee is trading at 62.95 to the US dollar.

Most PSU banks stocks are trading lower today. Bank of India and Canara Bank are among the stocks leading the losses. The Reserve Bank of India (RBI), in its monetary policy today has announced an interest rate hike. It has increased the benchmark lending rate, the repo rate, by 0.25% from 7.75% to 8%. It has left the cash reserve ratio (CRR) unchanged at 4%. RBI governor Raghuram Rajan has pointed to high inflation, especially consumer price inflation as the reason for this decision. However he has also stated that keeping in mind the weak economic growth environment, the RBI might reduce interest rates if inflation levels were to come down.

Most Indian pharma stocks are trading on a positive note. Dishman Pharma and Glenmark Pharma are leading among the stocks leading the gainers. As per a leading business daily, Cadila Healthcare has decided to exit its Japanese business. The company has been operating in Japan through its 100% wholly owned subsidiary. Recently, Cadila undertook a portfolio and business strategy review and the move of exiting Japanese operation was triggered after of the same. The company has been operating in Japan after it acquired 100% stake in Tokyo based Nippon Universal in 2007. It may be noted that all of the company's exports markets grew during 1HFY14 except the Japanese operation which declined by 10.3% YoY. The company's operations are spread across developed countries like US, Europe, Japan and over 25 emerging markets. Cadila Healthcare is trading higher by 0.6% today.

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