Even though the policy was in keeping with the market expectation, market players were still disappointed by the lack of any positive steps in the direction of growth provided by the RBI.
“For once the RBI policy was in keeping with our expectations. The market had already factored in the ‘no interest rate hike' stance,” said Mr Kishor Ostwal, Chairman & Managing Director, CNI Research.
Market men expressed disappointment at RBI's non-action on the CRR and the SLR rates. A Cash Reserve Ratio cut was expected in a bid to enhance liquidity in the system.
“There should have been some action on the CRR and Statutory Liquidity Ratio rates. The RBI lost an opportunity for creating positive sentiment in the market. This shows that the focus on growth has not come back,” said Mr Sudip Bandyopadhyay, Managing Director & Chief Executive Officer, Destimoney Securities.
“The signal corporate India was looking for remains illusive and focus on growth has still not come back. While inflation concern remains, a symbolic gesture by reducing the rates and or the CRR could have created a virtuous cycle of positive sentiment,” Mr Bandyopadhyay added.
“There is no support in the form of policy initiatives to the market. It's a lack of political will that is affecting the markets,” said Mr Chokkalingam G, Executive Director & Chief Investment Officer, Centrum Wealth Management.
According to market men, liquidity enhancement is one of the biggest concerns for the market right now. Inflation still continues to remain a concern, even though it declined to 9.11 per cent in November, down from 9.73 per cent in October.
The RBI's lack of policy initiation in either of these directions via a CRR or SLR cut seems to have further dampened the market mood. FII may drift away further, due to the lack of any policy action, fear market players, who are convinced that the market hasn't seen the bottom yet.
sneha.p@thehindu.co.in