The key equity indices pared all losses and edged higher in morning trade after the RBI hiked the benchmark repo rate by 35 bps, in line with market expectations. The Nifty hovered near the 18,650 mark.

At 10:32 IST, the barometer index, the S&P BSE Sensex, was up 65.5 points or 0.10% to 62,691.86. The Nifty 50 index added 6.85 points or 0.04% to 18,649.60.

In the broader market, the S&P BSE Mid-Cap index rose 0.18% while the S&P BSE Small-Cap index gained 0.05%.

The market breadth was positive. On the BSE, 1835 shares rose and 1317 shares fell. A total of 155 shares were unchanged.

RBI MPC Meet Outcome:

The Reserve Bank of India (RBI) raised the policy repo rate by 35 bps to 6.25% after the conclusion of the Monetary Policy Committee (MPC) meeting today, 7 December 2022.

The Nifty Bank index was up 0.38% at 43,303.30. Meanwhile, the Nifty 50 index was up 0.10% at 18,661.30.

AU Small Finance Bank (up 2.42%), Punjab National Bank (up 0.90%), ICICI Bank (up 0.87%), Bandhan Bank (up 0.67%), Axis Bank (up 0.42%), IDFC First Bank (up 0.41%), SBI (up 0.39%), HDFC Bank (up 0.38%), Bank of Baroda (up 0.34%) and Federal Bank (up 0.04%) climbed.

Indusind Bank (down 0.33%) and Kotak Mahindra Bank (down 0.83%) declined.

RBI governor Shaktikanta Das announced that the central bank has hiked lending rate by 35 basis points as inflation has started showing signs of easing and economic growth tapering.

Standing Deposit Facility rate and Marginal Standing Facility Rate were also increased by 35 basis points each to 6% and 6.5%.

Das said the MPC voted 4-2 to remain focused on withdrawal of accommodation so that inflation remains within the target going forward while supporting growth.

On balance, MPC was of the view that further calibrated action was warranted to keep inflation expectation anchored, break core inflation persistence and contain second round effects.

RBI expects inflation to be above 4% in the next 12 months. The GDP growth forecast for October-December 2022 is lowered to 4.4%. It is lowered to 4.2% for January-March 2023 period.

Stocks in Spotlight:

Bikaji Foods International advanced 3.40%. The company's consolidated net profit jumped 43.6% to Rs 40.93 crore on 31.8% rise in net sales to Rs 576.97 crore in Q2 FY23 over Q2 FY22.

Vedanta added 0.22%. The mining company on Tuesday announced that its board will meet on Friday, 9 December 2022 to consider fund raising by issuing non-convertible debentures (NCDs) aggregating up to Rs 500 crore in one or more tranches.

Ugro Capital rose 0.62%. A meeting of the Investment and borrowing committee of the board of directors is scheduled to be held on 9 December 2022, to consider and approve raising of funds by way of issuance of market-linked non-convertible debentures on private placement basis.

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