CapitalVia's input on RBI Repo Rate

Mr. Vivek Gupta – Director Research - CapitalVia Global Research Limited

"RBI has done a hike of 25 bps on the reverse repo rate from 7.75% to 8% as of now. This move is basically to bring down the Consumer Price Index (CPI) which was around 9.8% in December.

Also, Marginal standing facility is hiked by 25 bps to 9 percent and cash reserve ratio (CRR) is unchanged.

Although this move will be taken negatively in short term by the markets but market as most of the time discounts the sentiments in advance had a good correction since the beginning of this week. Most important thing which has to be seen as of now is Nifty spot should not close and sustain below 6125 because this is the level which was holding markets for a long time. If Nifty spot closes below this level then with the current sentiments of rate cut and global market weakening we may see a correction up to 6010 and 5900 on Nifty."

Source : Equity Bulls

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