Stock Market : Sensex & Nifty Are in Red

Stock Market: Indian stock markets fell after the Reserve Bank of India announced its monetary policy. Sensex was down about 0.27% at 11:29 am while Nifty dropped 0.3% to 18,580.

Indian equity benchmarks fell after see-sawing between gains and losses in early trade on Wednesday, extending losses for the fourth straight day ahead of a widely expected rate hike, with traders waiting for details on the RBI’s outlook in its fight against domestic inflation.

“The MPC delivered the 35 bps hike as expected while retaining the stance as ‘withdrawal of accommodation.’ We continue to expect the focus of MPC to remain in a watchful mode as uncertainties on inflation settle down. We see a possibility of another 25 bps rate hike before a prolonged pause,” Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank.

“Markets are likely to witness a choppy trend in early trades Wednesday amid weakness in other Asian indices, as RBI’s monetary policy meeting on interest rates will be keenly eyed by the investors,” said Prashanth Tapse, Senior Vice President for Research at Mehta Equities.

“RBI’s statement on the inflation & growth outlook would determine the market sentiment in the near term. Technically, investors should refrain from taking large leveraged positions until Nifty clears its all-time-high of 18,888 marks. The line in the sand is at Nifty’s support at 18,417,” he added.

Asia’s third largest economy continues to remain above the upper level of the RBI’s tolerance band of 4-6 per cent, even as it touched a three month low of 6.77 per cent in October, the focus will be on the central bank’s outlook on growth and prices for direction.

The indexes have fluctuated over the previous three sessions due to the RBI meeting and solid US data, which dampened hopes that the Federal Reserve will reduce the rate hike cycle.

Also read: RBI Set To Raise Rates: RBI Monetary Policy

Globally, investors dampened their euphoria about China’s reopening as reality chewed into expectations for a softer economic landing in the United States pauses the rally in world stocks.

Overnight, the S&P 500 fell for a fourth straight session, putting the breaks on an almost two-month-long run. Brent futures are now trading around $79.50 per barrel, returning oil to where it was at the start of the year.

The Nikkei in Japan fell 0.5 per cent, while the MSCI’s broadest index of Asia-Pacific shares outside of Japan declined 0.4 per cent.

Longer-dated bonds gained in response to those growth concerns, and the safe-haven dollar was able to halt its recent decline.