The Reserve Bank's decision not to cut key policy rates is slightly negative for Indian equities and rupee in the near term, says a Nomura report.
The surprising decision not to cut rates is slightly negative for India equities and INR in the near term; however, we maintain our medium-term view of INR outperformance and long INR position in our RV portfolio," Nomura said in a research note.
According to Nomura expectations for a rate cut had built up after the government had stuck to its path of fiscal consolidation in a prudent (rather than a populist) budget.
Following the Reserve Bank's surprise decision not to cut rates there was a sharp plunge in the Sensex within minutes of the policy announcement amid a heavy pounding of bank stocks on February 8.
BSE's Sensex ended the day 45.24 points lower at 28,289.92 on February 8, after recouping a large part of its intra-day loss of 186 points.
The rupee is currently hovering at 66.95 against the dollar.
The surprising decision not to cut rates is slightly negative for India equities and INR in the near term; however, we maintain our medium-term view of INR outperformance and long INR position in our RV portfolio," Nomura said in a research note.
According to Nomura expectations for a rate cut had built up after the government had stuck to its path of fiscal consolidation in a prudent (rather than a populist) budget.
Following the Reserve Bank's surprise decision not to cut rates there was a sharp plunge in the Sensex within minutes of the policy announcement amid a heavy pounding of bank stocks on February 8.
BSE's Sensex ended the day 45.24 points lower at 28,289.92 on February 8, after recouping a large part of its intra-day loss of 186 points.
The rupee is currently hovering at 66.95 against the dollar.
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