RBI cuts repo rate by 40bps to 4%, sees contraction in FY21 GDP growth

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Indian markets declined on Friday even as the Reserve Bank of India (RBI) slashed repo rate by 40 basis points (bps) to 4 per cent and maintained the stance ‘accomodative’. Consequently, reverse repo rate now stands at 3.35 per cent from 3.75 per cent earlier. Moreover, RBI Governor Shaktikanta Das said that the GDP growth in FY21 is expected to be in negative territory. READ MORE

Among headline indices, the S&P BSE Sensex slipped 290 points to around 30,630 levels and the Nifty50 index slipped below the 9,050 level. Infosys gained 2 per cent after the class action lawsuit filed against the company in the US was dismissed. Reliance Industries gained 1 per cent after the conglomerate said that KKR would invest Rs 11,367 crore into Jio Platforms for 2.32 per cent equity stake. READ MORE

The trends among Nifty sectoral indices was mixed. Nifty PSU Bank index, up 1.8 per cent, gained the most.

Results today: A total of 25 companies including Alembic Pharmaceuticals, IDFC First Bank, and UPL, are scheduled to announce their March quarter earnings later in the day.

COMMENT :: VK Vijayakumar, chief investment strategist, Geojit Financial Services

RBI, which has been proactive in recent times, has risen to the occasion by advancing the policy meet to cut policy rates by 40bp. Also, the unequivocal statement that monetary policy will continue to be accommodative till growth revives sends positive signals. The fact that the central bank has refrained from giving a GDP growth figure is a reflection of the complexity in giving projections with the present growth models. Extension of the moratorium announced earlier by another 3 months is a relief. A takeaway from the policy announcement is that the stress in the banking sector will continue..Read More

Is it the best time to buy a house? Yes, say experts

In a recent interview, Keki Mistry, chief executive at HDFC said it is best time to buy a property

 

#LATEST | Lower prices, lower interest rates and rising affordability have made it the best time to buy residential properties, say experts.

In a recent interview, Keki Mistry, chief executive at HDFC bank said it is the best time to buy a property.

" First, by virtue of the fact that interest rates are significantly low. Since 2008, e whave not seen rates as low as this. I don't believe rates will go down any further.Second, property prices haven't gone up in recent times so one would believe there is time correction of prices. Third, all incentives are provided by the government for people to buy houses,"Mistry said.

Rates:

Mortgage rates have come down by 150 basis points in the last two years bringing them down to 12-year lows, and this is gradually improving affordability. Every 100 basis points mortgage-rate cut is equal to 5-6 per cent price cut, CLSA has noted.

Prices:

Housing prices fell by 1.67 per cent to Rs 6,185 per sq ft in Q4 (January- March) from Rs 6,290 per sq ft in the December quarter in major cities such as Gurugram, Noida, Mumbai, Kolkata, Hyderabad, Bengaluru, Pune and Chennai, data analytics firm PropEquity has said.

According to international brokerage firm CLSA,the price of a mass-premium house located in a metro city suburb having a ticket price of Rs 60 lakh has remained flat on a year-on-year basis.

"For buyers it is a good time to buy as buyers have remained stagnant in the last three years. In fact they can get discounts. But for investors, if they get a distressed valuation and no completion risk, it is not a good time," Amit Bhagat, chief executive at ASK Property Investment Advisors.| READ MORE..

A guide to creating a retirement budget -Business Standard

Planning for the future is as easy as planning a trip. Start with these five steps

Retirement means taking things easy. But in order to have a happy one it is never a good idea to be complacent about the planning. Finance institutions like HDFC Bank  offer tailor-made innovative pension plans to provide financial security for a happy retired life without compromising on living standards. 

Experts, in fact, recommend that retirement planning should start from the day you start earning. Presenting six steps to help retire in comfort.

1. Budget for retirement

Knowing post-retirement expenses is crucial to retirement planning.

Two ways to do it: 

a. Estimate the retirement fund

Every individual needs roughly about 70% to 80% of pre-retirement gross income. Sooner one starts, the better it is. That way even after the paychecks stop coming, life doesn’t. 

It’s a good idea to consult a financial advisor on how to create a monthly budget. Many reputed financial firms, like HDFC Life, have formulated retirement expense worksheets, so the help needed to pencil out a budget for retirement is just a click away. 

b. Create a detailed monthly budget for retirement

Some expenses, such as those on clothing and entertainment, come down. Others, such as transportation, medicine and insurance, go up. Typically, during the initial retirement years, people spend more on travel and leisure activities, and later, more on health. It is important to note that everyone’s situation is different, so what works for one individual may not work for another. 

How to come up with an estimate?

Start with your current spending pattern: Use your monthly take-home pay as a starting point, and then ask a few questions. 

• What amount gets currently deposited to your account after all deductions for taxes, retirement plans, insurance, etc. are done?
• What expenses will have to be paid out-of-pocket post retirement?
• Any major home repairs or automobile purchases required?
• Are there any expenses that will decrease post retirement? Are there any major expenses that may occur post retirement? Like child’s marriage

One must carefully deliberate, evaluate and add up all the expenses you’re likely to incur after retirement, especially during the first year of retirement. Then, adjust it to reach an affordable and yet comfortable retirement lifestyle.

(READ MORE )