Sensex down 215 points, Nifty below 16,400
Equity benchmarks extended their fall for the fourth straight session on Wednesday, with the Sensex falling 214.85 points after the Reserve Bank raised the key interest rate by 50 basis points. Frequent foreign fund outflows and rise in crude oil prices also weighed on the markets.
The 30-share BSE benchmark ended 214.85 points or 0.39 per cent lower at 54,892.49. The benchmark touched a high of 55,423.97 and a low of 54,683.30 during the day. The broader NSE Nifty ended 60.10 points or 0.37 per cent lower at 16,356.25.
Home, auto and other loan EMIs will increase after the Reserve Bank of India (RBI) on Wednesday hiked the key interest rate by 50 basis points, the second hike in five weeks to rein in price hikes, which continue to hurt consumers. is delivering. In the near future.
With inflation hovering consistently above the upper tolerance limit of 6 per cent, Governor Shaktikanta Das said the six-member RBI rate-setting panel unanimously agreed to raise the lending rate of the repo rate by 50 basis points to 4.90 per cent. Voted. ,
From the Sensex pack, Bharti Airtel, ITC, Reliance Industries, Asian Paints, IndusInd Bank, ICICI Bank and Kotak Mahindra Bank were among the laggards. Conversely, Tata Steel, State Bank of India, Dr Reddy’s, Bajaj Finance, TCS and Titan were among the gainers.
“RBI’s GDP growth rate of 7.2 per cent and inflation projection of 6.7 per cent for FY23 reflect a realistic monetary policy. Higher inflation projection indicates that the central bank recognizes the severity of inflation and the 50 bps repo rate hike is a message We are determined to ease inflation expectations. The Governor’s remarks that the economy remains resilient and the recovery has accelerated is bullish from a market perspective,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
The increase comes after a 40 bps increase at an unscheduled meeting in early May that closed the tight circle of the central bank.
To balance the inflation-growth dynamics, Das said the RBI will focus on return of housing as system liquidity remains high. He said that the evacuation of housing would be done in such a way that the development continues to get adequate support.
The Monetary Policy Committee (MPC) raised its inflation forecast for the current fiscal (April 2022 to March 2023) to 6.7 per cent from April’s estimate of 5.7 per cent, but retained its economic growth forecast at 7.2 per cent.
Elsewhere in Asia, markets in Shanghai, Tokyo and Hong Kong ended higher, while Seoul closed lower. European markets were trading mostly lower during the afternoon trade. US stock markets closed with gains on Tuesday.
“Contrary to the results of the previous MPC meetings, the rate hike and subsequent steps announced this time are in line with consensus estimates. Though the RBI’s stance has not changed to neutral, there is a subtle shift from the words ‘balance adjustment’. The return of ‘is an important step.
Yasha Shah, Head of Equity Research, said, “The MPC has raised its CPI estimates for FY23 from 5.7 per cent to 6.7 per cent, which now appears to be a more realistic level. Contributes to trust.” Samco Securities.
Meanwhile, international oil benchmark Brent crude jumped 0.93 per cent to $121.69 a barrel. Foreign institutional investors offloaded shares worth Rs 2,293.98 crore on Tuesday, according to stock exchange data.
Read more: RBI hikes repo rate by 50 basis points to 4.90% to check inflation; EMI going to increase