TMS Ep165: RBI Rate Rise, Shanghai Pileup, Markets, Stock Consolidation
In a surprise announcement, RBI Governor Shaktikanta Das said on Wednesday that the monetary policy committee voted unanimously to raise the repo rate by 40 basis points to 4.40% with immediate effect. The repo rate has been increased for the first time since August 2018. What will be its impact on the economy? So what will be the impact on home buyers, borrowers and FD investors?
While the RBI’s rate hike signals the end of the low interest regime for home buyers, China’s new lockdown measures have also made buyers of durable consumer goods in India uneasy. The backlog of freighters and container ships near the port of Shanghai is likely to affect the durable consumer goods market, which is heavily dependent on components from China. As inventories of TV, air conditioner and refrigerator makers in India may start to dry up from mid-May, we are analyzing the looming crisis to understand its impact on consumers.
Back in the markets, the out-of-policy hike in the repo rate of 40 basis points and a 50 basis point hike in the cash reserve ratio by the Reserve Bank of India took investors by surprise on Wednesday. The decision came unexpectedly and on the opening day of LIC’s IPO. As the RBI turns more hawkish than expected, what does the road ahead look like for the markets?
In addition to a bullish and bearish trend, the markets also experience phases of consolidation. In today’s decode, we look at what a consolidation phase is, how to identify it and how to trade during such a phase. Let’s find out in this episode of the podcast.