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 Pulse
Indian market opened higher on firm Asian cues and is still maintaining that trend. Sensex is now trading in the green, though in between the stocks pared gains and slipped into the red. Overseas, Asian shares joined the global rally as strong world growth and rising corporate profits lured hordes of investors into equities. US stock-market indexes ended at records and near session highs yesterday, 21 November 2017, finding support on another round of strong earnings, with technology shares leading the way. The Chicago Fed national activity index rose to 0.65 in October from 0.36 in September. Sales of previously-owned homes jumped to a seasonally adjusted annual pace of 5.48 million in October. Meanwhile, Steel-dependent metal nickel posted early gains on Tuesday in both Shanghai and London markets in step with a stronger showing in Chinese steel futures.Nickel is chiefly used in making stainless steel.
I am of the belief that Moody's rally would continue for some more days, as the NDA government continues with its reform agenda. The the BSE Sensex is now at 33,523.23 up 44.88 points (+0.13%) and NSE is at 10,330.50 up 3.60 points. (+0.03%).

Today's Calls:
  • Intra-day: Sell Chennai Petro at around Rs.411.50, SL: Rs.418, T: Rs.402-399.
  • Buy Tata Motor Futures at around Rs.432-433, SL below Rs.428, T: Rs.438.
  • Buy Cummins at around Rs.855, SL: Rs.846, T: Rs.872-879, on T+1 basis. Book part profit at Rs.867...
  • Buy Tata Elsxi at around Rs.946-947, SL: Rs.920, T: Rs.975-985, on T+4 basis.
The stock of SKM Egg Products Ltd (Rs.100.40), which rose from the recommended price of around Rs.78-79 to more than Rs.115 in just 2 days, is currently consolidating. In the last one month, egg prices in the country recorded a huge jump, soaring as much as 40%. Every year, egg prices moves north due to increase in demand, during the winters; however, the rise has been phenomenal.Those who are still holding the shares should put a strict SL at Rs.96. I had asked for profit booking at around Rs.115.

The investors can buy the shares of Jai Balaji Industies Ltd at around Rs.13.50 (BSE) for targets of Rs.29-31, in the medium term. It is now a takeover candidate by established players. Moreover, with June quarter revenue of Rs.538.65 crore, Market Cap of only Rs.130.60 crore and loss trimming down to Rs.38.04 crore against Rs.55.14 in Q2FY17, I feel the stock is a good investment play on the Indian infrastructure sector.

The stock of B F Utilities Ltd, which I recommended on 23 August, 2013 at around Rs.129-130, today touched Rs.527. Congratulations to the long term investors, who are still holding the scrip.

The stock of HDIL, which was recommended few weeks back at around Rs.52-53, is now consolidating above Rs.62, for the next round of upmove. The share recently touched Rs.66, before  correcting a bit. The next targets for the scrip is Rs.72, if it manages to close above Rs.67.50.

Buy the shares of Shilpi Cable Technologies Ltd at around Rs.14.45, for targets of around Rs.17-19. Since some days, the telecom stocks are doing well. The short term correction in the scrip seems to be over.

The scrip of Gammon Infrastructure Ltd, which was recommended around Rs.2.90 is doing well today and is now trading at around Rs.3.15. Gammon Infrastructure is a subsidiary of the infrastructure major Gammon India Ltd (Rs.6.87). If you are not comfortable with Gammon Infrastructure Ltd, then you can opt for the the shares of parent company, Gammon India Ltd -- Buy on market dips.

Crude Oil prices rose on Wednesday as ongoing cuts of piped Canadian crude to the United States added to falling U.S. crude inventories, while expectations of a prolonged OPEC-led production cut also offered support. Those who have invested in the shares of shares of Aban Offshore Ltd at around Rs.191 (CMP: Rs.202), can keep holding  for short term targets of Rs.207-209. SL: Rs.96.

Gitanjali Gems Ltd (Rs.80.50) recently recommended around Rs.67, today touched Rs.84.55. Those who are still holding the scrip can book 80% profit and hold the rest with a SL of Rs.78, for the next logical target of Rs.87. Gitanjali Gems Ltd was recommended many times earlier too, below Rs.50. You can search my blog, for previous recommended prices of Gitanjali Gems Ltd.

You can buy the shares of J P Associates Ltd at around Rs.19, for short term target of Rs.21. If it manages to close above Rs.22, in the next couple of days, then we can look for target of Rs.25-26.

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