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  Shares of rate sensitive sectors were trading mixed with banks largely lower after the Reserve Bank of India (RBI) maintained 'status quo' on interest rates during the bi-monthly monetary policy decision. While, automobiles, real estate, select non-banking financial companies (NBFCs) and housing finance companies stocks were trading up to 1 per cent higher, the benchmark Nifty50 index was down 0.06 per cent at 10:38 am. The Reserve Bank of India's six-member monetary policy committee, headed by governor Shaktikanta Das, on Friday kept the benchmark interest rate unchanged amid coronavirus uncertainty and fears over inflation. The repo rate (lending rate) will continue at 4.00 per cent and reverse repo rate (RBI’s borrowing rate) at 3.35 per cent. With this, the repo rate has remained unchanged for the sixth consecutive time. Among individual stocks, Hero MotoCorp, MRF and Mahindra & Mahindra from the automobile pack; and Phoenix Mills, Brigade Enterprises, Godrej Prop

  The Securities and Exchange Board of India (Sebi) on Thursday revised the overseas investment limit for mutual funds (MFs). The market regulator stated in a circular that MFs can make overseas investments up to $1 billion each, within the overall industry limit of $7 billion. MFs had made representations to the regulator to increase the investment limit. Last November, Sebi had enhanced the overseas investment limit from $300 million per mutual fund to $600 million. Industry participants say this announcement was the need of the hour as several MF schemes that were international focused were attracting huge inflows. Sebi in its circular stated, “MFs can make investments in overseas exchange-traded funds (ETFs) subject to a maximum of $300 million per mutual fund, within the overall industry limit of US $1 billion.” Earlier the limit was $200 million per mutual fund. Indian fund houses have launched various international-focused fund of funds (FoF) in the last few months as such produ

  The Reserve Bank of India’s (RBI’s) policy comes at a critical time when the economy is in the midst of a confused lockdown with different perspectives on growth and a definite direction for inflation. The monetary policy committee (MPC) has reiterated in the past the accommodative stance, and hence the takeaway is that there are few chances of the repo rate being increased in the near future. Some of the important signals provided are the following. First, is the outlook on growth and here the RBI has scaled down the forecast to 9.5 per cent, which is now closer to what most analysts have done (CARE is 8.8-9 per cent). A single-digit growth sounds less attractive than a double-digit one. In fact, the rate would be declining over the quarters sequentially. Therefore, this also supports the MPC view that growth is weaker than expected and hence requires support from the monetary authority. The second view is on inflation, which is still unchanged at 5.1 per cent for the year. This may

  The Reserve Bank of India (RBI) has cut its projection for gross domestic product (GDP) growth for fiscal 2021-22 (FY22) to 9.5 per cent from the earlier forecast of 10.5 per cent. Consumer price inflation (CPI), the central bank said, is likely to be at 5.1 per cent in FY22 as compared to the earlier forecast of 5.2 per cent (5.2 per cent in Q1; 5.4 per cent in Q2; 4.7 per cent in Q3; and 5.3 per cent in Q4) with risks evenly balanced. “Going forward, the inflation trajectory is likely to be shaped by uncertainties impinging on the upside and the downside. The rising trajectory of international commodity prices, especially of crude, together with logistics costs, pose upside risks to the inflation outlook,” the RBI said. Adding: “Rural demand remains strong and the expected normal monsoon bodes well for sustaining its buoyancy, going forward. The increased spread of COVID-19 infections in rural areas, however, poses downside risks.” The lowering of GDP projections comes on the back