Markets Fall 1 Percent Following RBI Monetary Policy Announcement; Bank Stocks Drag

The benchmark stock indices Sensex and Nifty fell nearly 1 percent on Thursday, pulled down by selling in banking and auto sectors amid greater uncertainty about the timing of interest rate cuts following the RBI’s monetary policy decision.

The 30-share BSE Sensex lost all of its early gains, sliding 723.57 points or 1 percent to close at 71,428.43. The barometer fell into the red following the release of the RBI’s monetary policy and reached a low of 71,230.62, representing a loss of 921.38 points or 1.27 percent.

The Nifty closed at 21,717.95, down 212.55 points or 0.97 percent.

The RBI Monetary Policy Committee voted on Thursday to hold the policy rate constant for the sixth time in a row, citing global uncertainty and the need to reduce retail inflation to 4 percent. The RBI also maintained its ‘removal of accommodating stance’.

RBI Governor Shaktikanta Das announced on Thursday that the Monetary Policy Committee (MPC) has decided to hold the policy repo rate steady after assessing the existing and emerging macroeconomic circumstances.

ITC, Kotak Mahindra Bank, ICICI Bank, Nestle, Axis Bank, IndusInd Bank, UltraTech Cement, Bajaj Finance, Maruti, and HDFC Bank were the Sensex’s biggest laggards.

The gainers included State Bank of India, PowerGrid, Tata Consultancy Services, HCL Technologies, and Reliance Industries.

In Asian markets, Seoul, Tokyo, and Shanghai closed higher, while Hong Kong closed lower.

European markets were up.

The US markets closed higher on Wednesday.

Brent crude lost 0.18 percent to $79.07 per barrel.

According to exchange data, Foreign Institutional Investors (FIIs) sold securities worth Rs 1,691.02 crore on Wednesday.

On Wednesday, the BSE benchmark dipped 34.09 points, or 0.05 percent to 72,152, while the Nifty closed up 1.10 points, or 0.01 percent, to 21,930.50.

Also read: US Missing Chopper Recovered In California, While The Search For Five Marines Continues