Benchmark indices continued to fall for a third day on Wednesday after RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) had voted to raise the repo rate. At Close, the Sensex lost 1,306.96 points or 2.29 percent at 55,669.03, and the Nifty fell 391.50 points or 2.29 percent at 16,677.60. About 825 stocks are up, 2454 stocks are down and 98 stocks are unchanged.
Apollo Hospitals, Adani Ports, Hindalco Industries, Bajaj Finance and Bajaj Finserv were among the top losers, while the winners were ONGC, Britannia Industries, Power Grid Corporation, NTPC and Kotak Mahindra Bank.
All sector indices ended in the red, with automotive, banking, FMCG, energy, metals, real estate, healthcare and capital goods indices falling 1-3 percent. The BSE mid-cap index lost 2.63 percent and the small-cap index fell 2.11 percent.
dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “The decision by the MPC, in an unscheduled meeting, to increase the repo rate by 40 bps and the CRR by 50 bps is a surprise as it is on the opening date MPC’s proactive move is justified from an inflation management perspective, but timing leaves much to be desired. 10-year bond yields have risen above 7.39 percent, pointing to an imminent rise in fund costs.”
Yash Gupta- Equity Research Analyst, Angel One Ltd, said: “RBI (Research Bank of India) passed a 40 basis point rate hike on May 4, 2022. This meeting of MPC is an off-cycle meeting to be held on May 2 2022, in which all MPC members have decided on a rate hike. RBI also said inflation will also rise in April 2022. Markets did not expect this, Indian markets are watching Fed policy, but in between the RBI has raised its rate by 40 bps to dampen inflation and the Repo rate is now 4.40 percent.”
Global clues
US stocks saw modest gains after a turbulent trading day on Tuesday as Wall Street waits to find out how aggressively the Federal Reserve will raise interest rates at its final policy meeting on Wednesday. The S&P 500 ended 0.5 percent higher after briefly slipping into the red earlier in the day. The Dow Jones Industrial Average rose 0.5 percent and the Nasdaq rose 0.2 percent. Banks and other financial stocks propped up the market.
Hong Kong stocks started off with a small loss on Wednesday after Wall Street took a slightly positive lead ahead of an expected decision to hike rates by the Federal Reserve later in the day. The Hang Seng index fell 0.36 percent or 76.19 points to 21,025.70.
The financial markets in China, Indonesia, Japan, Malaysia and Thailand will be closed on Wednesday for holidays.
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