Because of increase in Inflation now we have seen that RBI increased Repo Rate, Many think it is negative for Stock market, but it might be negative in the short term but in long term it affects positively on economy, so Positive for Stocks market in long term, but you might be thinking is there any stocks will have positive impact in short term by Repo rate increase those are Banking stocks.
In last two years we have seen massive run in different stocks, but Financial sector is still lacking, and if we see the positives.
Because of the increase in Repo rate , all the interest for loans will increase either which are taking in past are which are going to be taken in future, but bank’s no need to pay extra interest for FDs which are already given, if some one is doing FD recently then only banks have to pay more interest, And now because of stock market volatility many people tend to invest in safe Investments like Fixed Deposits.
And if we discuss about the Stocks which can consider to invest, Invest in the stocks which have more customer base, invest the stocks which is more popular, invest in the stock which is more reliable, so many investors avoid Financial /Banking sector stocks because there are chance of fraud in these stocks, in order to avoid Capital loss we need to invest in only Stable /Large cap Companies.
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FunTech Team