Following the RBI's announcement of maintaining the status quo, buying activity strengthened leading the Indian markets to trade firm throughout the rest of the day. The BSE-Sensex closed higher by about 205 points or 1.2%, while the NSE-Nifty ended higher by about 80 points or 1.3%. Gains were seen in stocks across the board with those from realty and capital goods spaces leading the pack of gainers. BSE Mid Cap and BSE Small Cap stocks were trading firm as well, with their respective indices up by 1.4% and 1.1% respectively.
Stock markets in other parts of Asia ended the day on a mixed note with China down by about 0.1%, while Hong Kong and Japan ended higher by about 0.3% and 2% respectively. The rupee was trading at Rs 61.98 to the dollar at the time of writing.
Stocks of logistics companies ended the day on a weak note with Allcargo Logistics, Container Corporation of India (Concor) and Sical Logistics being the top underperformers. As per the Hindu Business Line, Concor is expected to complete its Rs 3.5 bn multi-modal logistics park at Vishakhapatnam within a period of 2.5 years. This would be part of the company's Rs 60 bn capex program which involves setting up 15 logistics parks across the country. This is the aim of the company in the current five-year plan. In addition to discussing its capex plans, the company's management also discussed its outlook on the container volumes growth. As compared to the last year's flat growth, the management expects a 10-15% growth in container volumes this fiscal. As per the management, growth is largely expected to come in from the exports market.
Stocks of real estate companies ended the day on a firm note led by HDIL, DLF and Unitech. Given the high inflation rates announced recently, it was expected that the RBI would hike interest rates in today's review. If that was the case, it would have been an unfavourable move for the real estate players, especially considering that they are already reeling under the pressure of high unsold inventory. Over the past few days, stocks from this sector were thus under pressure. However, with the RBI not making any changes to the interest rates, it seems that investors have cheered the move and thus have bought into stocks of real estate players today. While there are discussions of this move being a major change for the industry, investors would do well to understand the main reasons behind the RBI's decision to keep things unchanged, which includes the probability of the food prices coming down in the coming months. This should be the key point to be gauged when taking a call on the interest rates, we believe. As Dr. Rajan has stated, the country cannot be complacent and must work towards lowering consumer price inflation.