India's central bank kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0 per cent and the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL).
"We think the main reason behind this is that RBI is holding the job of maintaining the Credibility of the processes like anti-inflation process while keeping in the consideration quite a lot of currency pressure," said Rohit Gadia, Founder & CEO, CapitalVia Global Research Limited.
"RBI has set a glide path for CPI inflation at 8 per cent by January 15 and 6 per cent by January 2016. So RBI can raise interest rate even in the next review if they see that CPI numbers are going out of ease," he added.
Since June, headline inflation has ebbed to levels which are consistent with the desired near-term glide path of disinflation -- 8 per cent by January 2015.
However, with international crude prices softening and relative stability in the foreign exchange market, some upside risks to inflation are receding, RBI said in a statement.
Therefore, the future policy stance will be influenced by the Reserve Bank's projections of inflation relative to the medium term objective (6 per cent by January 2016), while being contingent on incoming data.
"For market, the policy has come as per expectation and more importantly those expectations were managed way ahead of the policy so hopefully there should not be any reaction from the market," said Nilesh Shah, MD & CEO, Axis Capital.
Analysts do not expect rate cut anytime soon but the action will remain in individual stocks. Investors should bet on quality stocks from the rate-sensitive basket.
We have collated list of fifteen stocks which can give up to 49 per cent return in the next 6-12 months:
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Analyst: Ranajit Kumar Saha, AVP - Technical Research at Microsec Capital Ltd
United Bank: Buy around 38-40 SL: 34 Target: 54
Rationale: United Bank has corrected almost 35 percent from its recent high of Rs 61.75 made on 4th July, 2014. Now the stock is likely to find a strong support at Rs 38 (near 200 DMA). We recommend accumulating the stock around 38-40 for the target of Rs 54.
M&M Finance: Buy around 270-280 SL: 230 Target: 340
Rationale: After making a recent high of 295.75 on 15th September, 2014, M&M Fin. Service Ltd. corrected almost 8 percent. Now it is expected to get a strong support near 265. We recommend initiating long position in the stock with stop loss of Rs 230 for the target price of Rs 340.
Ashok Leyland Ltd.: Buy around 40-41 SL: 33 Target: 54
Rationale: Ashok Leyland Ltd. has given a bullish break out at Rs 40 with decant volumes on monthly chart.The stock expected to test Rs 54 in the near future. We recommend initiating long positions in the stock with stop loss of Rs 33
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