The Indian stock market opened on a sluggish note today, with both the Nifty and Sensex indices dipping over half a percent. This downturn occurred despite the Reserve Bank of India (RBI) announcing a significant cut in the repo rate and shifting its stance from "accommodative" to "neutral." On April 9, the RBI’s Monetary Policy Committee (MPC) unanimously decided to reduce the repo rate by 25 basis points, bringing it down to 6% effective immediately.

Rate-Sensitive Sectors Experience Mixed Outcomes

In the wake of the RBI’s announcement, sectors sensitive to interest rates exhibited a mixed performance. The Bank Nifty and Nifty Private Bank indices fell by around 1%, indicating a cautious sentiment among investors. Notably, the Nifty Realty index experienced a sharp decline, plummeting 2.5% during the trading session, while the Nifty Auto index saw a modest uptick of 1%.

• Key Insights from Experts:
  • Avinash Gorakshkar, Head of Research at Profitmart Securities, indicated that the rate cut is likely to benefit sectors like banking, auto, consumer durables, and real estate. He noted that lower rates could encourage banks to reduce monthly EMIs on loans, boosting their business and earnings in upcoming quarters.
  • Conversely, Mahesh M. Ojha, AVP of Research at Hensex Securities, suggested a more cautious approach. He advised steering clear of real estate and auto stocks due to recession fears, while highlighting opportunities in consumer durables, banking, and finance sectors. He emphasized the preference for large-cap and mid-cap stocks over smaller ones.

Top Stock Picks Following RBI’s Decision

In light of the RBI’s monetary policy review, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, shared valuable stock recommendations.

• Banking Sector: Look for potential in large-cap stocks such as:
  • State Bank of India (SBI)
  • HDFC Bank
  • ICICI Bank
  • Axis Bank
• Financial Segment: Consider investments in:
  • Bajaj Finance
  • Bajaj Finserv
• Consumer Durables: Asian Paints is highlighted as a promising value pick.

Current Stock Performance

Here’s how some key stocks performed today:

• SBI: Experienced a decline of over 2%, trading at ₹753.50.
• Asian Paints: Saw a 1.19% increase, reaching ₹2,421.80.
• HDFC Bank: Fell nearly 1%, trading at ₹1,756.20.
• ICICI Bank: Dropped by 0.71%, priced at ₹1,290.55.
• Axis Bank: Plummeted 1.52%, trading at ₹1,061.45.
• Bajaj Finance: Decreased by over 2%, now at ₹8,646.70.
• Bajaj Finserv: Experienced a 0.6% decline, trading at ₹1,891.40.

The market’s reaction to the RBI’s decision showcases a complex landscape where investors must navigate varying sector performances. With interest rates poised to influence borrowing costs, the coming days may present both challenges and opportunities in the Indian stock market.