Shares of public sector banks (PSBs) and real estate companies were trading firm on the bourses in an otherwise weak market in late noon deal.
Union Bank of India, Andhra Bank, Oriental Bank of Commerce, Allahabad Bank, Canara Bank, Bank of Baroda and IDBI Bank from the PSU banks and Housing Development & Infrastructure Limited (HDIL), Unitech, Kolte-Patil Developers, Purvankara Projects and DLF from the real estate space rallied by more than 3% on the National Stock Exchange (NSE).
At 02:15 PM, Nifty PSU Bank and Nifty Realty index were up 2% each as compared to 0.52% decline in the Nifty50 index.
Post Budget, Nifty PSU Bank and Nifty Realty index has surged 23% each against 10% rise in the benchmark index.
The Reserve Bank of India (RBI) will present its first bi-annual monetary policy assessment for FY17 on 5 April.
Crisil Research expect the policy rate to be sliced by 25-50 basis points (bps) in 2016 as the Budget’s focus on fiscal consolidation had already created conditions for the RBI to cut rates.
“A benign inflation climate further allows for this; CPI, we believe, will stay soft at 5% average, unchanged from our estimate for fiscal 2016, if India is blessed with a normal monsoon. Given the excess industrial capacity, weak demand and soft commodity and crude oil prices, the impending Seventh Pay Commission payouts are unlikely to swing inflation away from the RBI’s glide path,” Crisil Research said in a note.