A few days back, Reserve Bank of India hiked repo rate (the rate at which it lends money to other
banks) by 25 basis points (or 0.25 percent). And this measure is expected to have a range of cascading effect in the economy and financial sector, including in infrastructure stocks. This is the biggest reason why, after a fairly positive analysis a few months back, infra stocks are falling. Lanco Infratech, BHEL, NBCC, Hindustan Urba, and Siemens have taken the biggest hit.
But worry not. Things will get better. Remember, infrastructure sector is a long-race horse. If you
have done your part of research carefully and properly, it’s very likely that you will reap big rewards in the coming years (because investment in India will continue soaring high at least for the next decade). Whenever RBI increases or decreases the interest rate, such negative (or positive) impact is almost always imminent. The turnover for infrastructure sector would slow down in the short-run.
With past trends as evidence and from my own personal experience, there’s nothing to panic for
the investors; traders need to be slightly cautious though. The market will regain its posture very soon; unless hit by some big economic or political crisis.