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Ambit Warns Four RBI Rate Hikes Could Derail Markets and Credit Growth
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CNBC TV18•07-10-2026, 13:16
Ambit Warns Four RBI Rate Hikes Could Derail Markets and Credit Growth
- •Dhiraj Agarwal of Ambit warns that four RBI rate hikes could severely impact the broader market and derail the recent recovery in credit growth.
- •While two to three rate hikes will be margin accretive for banks in the near term, a fourth hike could damage sectors like real estate and consumer discretionary demand.
- •Credit growth had recently rebounded to the 16 to 18 percent bracket after falling to 10 to 11 percent three quarters ago.
- •Agarwal prefers discretionary consumption stocks over staples, noting that staples are losing their historical distribution advantage to new direct-to-consumer internet brands.
Key Questions Answered
According to Dhiraj Agarwal of Ambit, while the market can digest up to three rate hikes, a fourth hike could severely derail credit growth and overall market sentiment.
Near-term rate hikes immediately filter into lending rates while deposit costs rise only with a lag, making two to three hikes margin accretive for banks in the near term.
Dhiraj Agarwal prefers discretionary consumption stocks over staples, noting that staples face heavy penetration and are losing their distribution advantage to new direct-to-consumer internet brands.
