- Indian benchmark indices ended lower after RBI's repo rate hike and policy shift
- Sensex fell 0.59% to 72,638.70, Nifty 50 dropped 0.76% to 22,603.05
- RBI raised repo rate by 25 bps to 5.5%, first hike in over three years
The Indian benchmark indices, BSE Sensex and NSE Nifty 50, snapped their two-day winning streak on Wednesday after the Reserve Bank of India (RBI) hiked the repo rate and changed its monetary policy stance, as was widely expected by the Street.
That said, the Sensex ended 0.59%, or 429.11 points, lower at 72,638.70 levels, while the Nifty 50 ended 173.05 points, or 0.76%, lower at 22,603.05 levels.
Halting its nearly two-year policy of monetary accommodation, the Reserve Bank of India (RBI) on Wednesday signalled a hawkish turn as it raised the benchmark lending rate by 25 basis points. The decision, backed unanimously by all members of the Monetary Policy Committee (MPC), led to the first rate hike in over three-and-a-half years.
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Consequently, the repo rate has increased to 5.5%, while the Standing Deposit Facility (SDF) rate has risen to 5.25%. The Marginal Standing Facility (MSF) rate and the Bank Rate have been revised to 5.75%.
More importantly, the MPC decisively changed its policy stance to "calibrated tightening", with four of the six MPC members backing the shift.
Individually, Titan, Asian Paints and BEL were top drags on 30-share BSE Sensex index. On the flipside, Kotak Mahindra Bank, Bharti Airtel and ICICI Bank were top gainers.
Broader markets ended mixed. The Nifty Smallcap 100 ended 0.30% higher, while Nifty Midcap 100 index closed 0.63% lower.
According to SBI Securities, the 22460–22440 zone could act as immediate support. A decisive break below this zone could revive selling pressure and trigger further correction towards 22300. On the upside, 22730–22750 could act as an immediate hurdle. A sustained move above this zone could extend the pullback rally towards 22900. Despite the recent recovery, the broader structure remains cautious.
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