At 10:40 am, Nifty Bank, Nifty Auto, and Nifty Financial Services indices were up between 1 per cent and 1.5 per cent, as compared to 0.8 per cent rise in the benchmark Nifty50 index. The Nifty Realty index was up 0.63 per cent on the NSE. State Bank of India (SBI), RBL Bank, ICICI Bank, Power Finance Corporation and Bajaj Finance from the financials were up in the range of 2 per cent to 3 per cent.
The RBI expects the Indian economy to contract 7.5 per cent for the current financial year 2020-21 (FY21). Q3FY21 GDP is seen at +0.1 per cent while Q4FY21 GDP is seen at +0.7 per cent, it said.
Turning to the growth outlook, the recovery in rural demand is expected to strengthen further, while urban demand is also gaining momentum as unlocking spurs activity and employment, especially of labour displaced by COVID-19. Fiscal stimulus is increasingly moving beyond being supportive of consumption and liquidity to supporting growth-generating investment. On the other hand, private investment is still slack and capacity utilisation has not fully recovered, RBI Governor Shaktikanta Das said in Monetary Policy Statement.
“RBI policy was on expected lines. They have prioritised growth over inflation. This is an acknowledgment that inflation drivers seem to be more supply side led. An accommodative liquidity stance will ensure access to liquidity will not be a challenge and the ongoing recovery continues to gather steam. This will help push through government borrowings in a year where the revenues are under pressure. Guidance is better than earlier on growth and flows. Positive for markets,” said Ashish Shanker, Deputy MD and Head of Investment, Motilal Oswal Private Wealth Management.
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