Buoyed by the strong IIP performance, but worried by rising inflation, the Reserve Bank of India (RBI) may go ahead with a rate hike. The street is,however, quite divided on the intermitting move by the central bank.
In an interview with CNBC-TV18, Manishi Raychaudhuri, MD and Research Head and Praveen Chakravarty, MD of BNP Paribas Securities, India share their view on the rate hike by RBI and the banking sector.
According to BNP Paribas, investors are considering that a rate hike is just round the corner. A further hike of 75 bps rate is expected, they say.
 BNP Paribas say that investors are focusing on banks with high CASA (Current Account and Savings Account) ratio. Axis Bank and HDFC Bank are the top picks in the sector.
They say there is no sense of fear or nervousness among investors. However there is some risk aversion in the midcap stocks. However, they add, inflow of funds is expected in large cap stocks.