Following this move, market experts suggest investors to put their money in banking stocks and keep away from the sectors which are sensitive to rate hikes such as real estate and housing finance companies (HFCs).
Yash Gupta- Equity Research Analyst, Angel One said rising interest rate tends to be positive for the banks. He is more positive on private lenders compared to state-run banks due to their rising market share.
He suggests investors to buy (Target: Rs 120), (Target: Rs 1700) and (Target: Rs 1695).
“The interest rate hike is negative for real-estate companies as increasing interest rates dampen the demand as loans will become expensive for home buyers,” he added.
Sunil Nyati, Managing Director,
said sectors that use commodities such as real estate, infrastructure, consumer discretionary, and durables will see an improvement in profitability as inflationary pressures will subside in the medium-term.
“Despite the hike, interest rates remain far below pre-pandemic times. We believe that the real estate sector will perform well at least in the medium term despite current rate hikes.”
However, Shaktikanta Das, RBI Governor, reiterated that consumer price inflation remains a cause of worry and monetary policy measures are needed to anchor inflation expectations.
As expected, the RBI sharply increased inflation projections, with CPI inflation for the current financial year now seen at 6.7 per cent. However, the GDP growth projection for the current financial year had been retained at 7.2 per cent.
AK Prabhakar, Head of Research,
Capital said a few sectors including IT and life insurance will not be much impacted by the inflationary worries.
His top picks from the IT sector are
, , L&T Infotech, and . “The sector is more impacted by global events.” From the insurance space, his top picks are and .
Sumit Chanda, founder and CEO, JARVIS Invest, an Artificial Intelligence (AI) based investment advisory startup, said RBI is taking the right steps to tackle inflation while not compromising on growth. He has picked up
, , and as his top stock ideas.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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