The S&P BSE Sensex fell 214.85 points (0.39%) to end at 54,892.49 points while the Nifty 50 slipped 60.10 points (0.37%) to settle at 16,356 ,25. Both indices had opened on a flat note earlier in the day and were largely trading in a narrow range from negative to positive following the RBI’s decision. However, they couldn’t hold on to the winnings and slipped in the afternoon deals.
On the Sensex pack, Bharti Airtel, ITC, Reliance Industries (RIL), Asian Paints, Axis Bank and IndusInd Bank were the big losers on Wednesday while Tata Steel, Dr. Reddy’s Laboratories, State Bank of India (SBI), Titan Company, Bajaj Finance, Maruti Suzuki India were the top winners.
Among the sector indices, rate-sensitive sectors – Nifty Realty rose 1.89%, Nifty Bank slipped 0.14%, Nifty Auto rose 0.18% and Nifty Financial Services ended down 0. .03%. Out of these, the Nifty FMCG index fell 1.05%.
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In the broader market, the S&P BSE MidCap Index ended at 22,530.72, down 33.75 points (0.15%) while the S&P BSE SmallCap came in at 25,978.00, down 87.30 points (0.33%). On NSE, the volatility index or India VIX fell 2.87% to 19.84.
On Wednesday, the RBI raised the interest rate by 50 basis points to a two-year high of 4.9% as it doubled to curb the rate of inflation which has surged in recent months. The move follows a increase of 40 basis points made by the central bank at an unscheduled meeting last month. All six MPC members voted unanimously for the latest rate hike.
Reacting to the RBI’s rate hike announcement and its impact on the markets, Ravi Singh, VP and Head of Research at Share India Securities, said: “In line with expectations, the RBI has raised the repo rate of 50 basis points and is already discounted by the market.The war between Ukraine and Russia has caused inflation in the world to rise beyond the tolerance level and is affecting economic growth However, most industries are already facing headwinds due to a sharp increase in raw material costs and fuel prices, and a rate hike will further increase the burden.The Fed is also raising the rate, it There is therefore a major possibility that apart from the equity market, other markets like the debt market and the bond market will see cash outflows anytime soon. banking and infrastructure uctures would be the most affected by rising rates, as debt financing is a large part of these sectors. The consumer staples, insurance, energy, power and utilities sectors provide a cushion against rising interest rates.
European stocks slid on Wednesday and Wall Street futures were in the red as fears that central bank tightening would stifle global growth weighed on markets.
Although Asian stocks strengthened overnight after Wall Street’s gains, market sentiment was volatile and European indices were mostly down. At 0756 GMT, the MSCI World Stock Index, which tracks stocks from 50 countries, was up 0.1%.
But Europe’s STOXX 600 fell 0.3% on the day, weighed down by banks after Credit Suisse warned it risked seeing a group-wide loss in the second quarter. Nasdaq futures and S&P 500 e-minis were both down around 0.5%.
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