The Repo Rate Hike: Inflation Gave the Cover, the Rupee Gave the Reason

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SumanSpeaks Independent Capital Markets & Geopolitical Intelligence RBI Policy Decoded The Repo Rate Hike: Inflation Gave the Cover, the Rupee Gave the Reason The RBI raised the repo rate by 25 basis points to 5.50 percent on 7 October 2026. With the rupee at ₹96.78 to the dollar, the Fed at 3.75–4.00 percent and bank credit growing near 18 percent, the fuller story is bigger than August CPI of 4.8 percent. The Reserve Bank of India raised the repo rate by 25 basis points to 5.50 percent on 7 October 2026. It is the first hike since February 2023, and the stance has moved from neutral to calibrated tightening. The rate decision was unanimous. The Governor cited inflation. The Monetary Policy Committee said the inflation outlook is no longer as comfortable as it was last year, and near-term rate cuts were taken off the table. That is the official story, and it is not wrong. But it is incomplete. Look at what surrounds the decision: a rupee near its record...
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Market Mantra
Soha Ali Khan at the Goenka Diamonds' Launch
Photo: Pinkvilla
The markets moved in line with expectations yesterday, taking cues from strong global markets, and finding support 7440 levels. It closed with a gain of 72 points at 7526. Although it was a more or less choppy session yesterday, the last hour of buying pulled it to a  high of 7535. This definitely gave more ammunition to the bulls. 

The bounce back of Nifty the support level of 7440 and the closing above 7500 shows buying interest at lower levels. Stay invested in Bank and Infrastructure stocks. Nifty is now trading at 7610, which is far above the resistance of 7580. 

Today's call:
(i) Buy IVRCL Ltd at Rs.24.40, T--Rs.27.20, SL--Rs.21. Most of the infrastructure stocks will move up taking cues from the budget.
(ii) Buy Marg Ltd at Rs.17.50, T--Rs.24, SL-Rs.15.50. In the recent budget the FM, has talked about strengthening the Shipping Sector. Also, the Finance Minister Arun Jaitley has proposed to award the development of 16 new port projects in the current fiscal year. Presenting the Union Budget 2014-15 in the Lok Sabha, Jaitley said, "A policy for encouraging the growth of Indian controlled tonnage will be formulated to ensure increase in employment of the Indian seafarers. Development of ports is also critical for boosting trade."
(ii) Buy Goenka Diamond and Jewels Ltd (BSE Code: 533189, Face Value: Re.1), for a target of Rs.4.80.  Though small players in the Gems and Jewelry sector are disappointed over not inclusion of their demand of introducing turnover tax among others, but many have expressed satisfaction over rationalization of customs duty for semi-processed, half cut or broken diamonds and cut and polished and coloured gemstones. This development has till now been  overlooked by the market. Goenka Diamonds Ltd is an established name in this sector.
(iv) Book profits in Rohit Ferro Tech Ltd at Rs.14.25 and enter Marg Ltd at around, which is a much safer play both on the infrastructure and shipping sectors. 

 Note: These calls were given to the Paid Groups, in the morning and yesterday, they were asked to book partial profits in Rohit Ferro Tech Ltd. The call on Marg Ltd was given yesterday at around Rs.16.50--17. I feel most of them have made money by now. 

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