Sensex falls 429 points, Nifty slips 173 points after RBI rate hike

Indian equity markets ended lower on Wednesday, with the Sensex and Nifty declining after the Reserve Bank of India shifted its monetary policy stance towards calibrated tightening. Investors also remained cautious amid inflation concerns, while the rupee slipped to a five-month low.

The NIFTY 50 closed at 22,603.05, down 173.05 points or 0.76 per cent. The BSE Sensex ended at 72,638.70, declining 429.11 points or 0.59 per cent.

Vikram Kasat, Chief Business Officer – Advisory and Dealing at PL Capital, said the decline reflected some profit-taking following the sharp recovery seen over the previous two sessions.

“Indian equities are witnessing some profit-taking after the sharp rebound of the previous two sessions, with the Sensex and Nifty declining amid caution ahead of the RBI policy decision,” Kasat said.

The RBI's decision to raise the repo rate by 25 bps to 5.50 per cent and move towards calibrated tightening further added to concerns surrounding inflation, elevated crude oil prices and the external environment.

Selling was visible across several major sectors. Nifty Auto fell 1.44 per cent, Nifty FMCG declined 0.99 per cent, Nifty IT dropped 1.31 per cent, while Nifty Metal fell 2.31 per cent. Nifty Pharma declined 0.42 per cent, Nifty Realty slipped 1.85 per cent, Nifty Consumer Durables dropped 1.32 per cent and Nifty Oil & Gas declined 0.51 per cent.

Some sectoral indices, however, ended higher. Nifty Media gained 0.60 per cent, Nifty PSU Bank rose 0.92 per cent and Nifty Private Bank advanced 0.13 per cent.

Among Nifty 50 stocks, Kotak Bank, BSE, Bharti Airtel, ICICI Bank, HDFC Life and Coal India were among the top gainers. Titan, Adani Enterprises, Hindalco, JSW Steel and BEL were among the top losers.

The rupee continued to weaken, falling 35 paise to Rs 96.77 per US dollar at the time of reporting, marking a five-month low.

Crude oil prices also remained a concern. Brent crude rose 1 per cent to USD 101.59 per barrel at the time of reporting.

In precious metals, gold declined 0.50 per cent to Rs 1,49,375 per 10 grams for 24 karats, while silver fell 1.07 per cent to Rs 2,24,800 per kg at the time of reporting.

Riyank Arora, Associate Vice President – HNI & Derivatives at Hedged.in, said the recent decline had brought the indices closer to important support levels.

“The recent weakness has brought the indices closer to their key support levels. While profit booking and selling pressure remain visible, the broader trend will remain intact as long as these supports hold. For now, a buy-on-dips approach in fundamentally strong and technically sound names remains preferable, with strict risk management and close monitoring of the key support zones”.

Asian markets also largely ended lower. Japan's Nikkei 225 declined 0.54 per cent to 70,303, while Singapore's Straits Times fell 1.63 per cent to 5,608.

Hong Kong's Hang Seng declined 0.79 per cent to 24,090, while Taiwan's weighted index slipped 0.03 per cent to 49,806. South Korea's KOSPI fell more than 2 per cent to the 6,803 level.