RBI Rate Hike Shakes Indian Markets: Sensex, Nifty End Lower Amid Renewed Tightening Concerns
The move, the first in over three years, left 41 of 50 Nifty stocks in the red as rate-sensitive sectors sold off.
- Benchmark indices Sensex and Nifty ended in the red after the Reserve Bank raised its benchmark interest rate by 25 basis points, marking its first increase in over three years.
- Marking the first increase in over three years, the rate hike prompted a cautious market reaction as investors reassessed exposure to rate-sensitive sectors and tighter monetary policy ahead.
- BSE Sensex closed 0.59 per cent lower, while NSE Nifty fell 0.76 per cent. Nifty Metal dropped 2.33 per cent, though Nifty PSU Bank gained 1 per cent.
- Pressure on the Indian rupee, which fell around 45 paise, combined with softer Asian markets to strain sentiment; 41 of 50 Nifty companies closed in the red today.
- Ponmudi, CEO of Enrich Money, said "the next phase of recovery is likely to depend on how rate-sensitive sectors absorb the shift toward a tighter policy stance." Overall, the bias has turned cautiously weak.
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Indian stock markets ended a two-day streak as RBI raised the repo rate by 25 basis points to 5.5%, causing the Nifty 50 to drop 0.76% and the Sensex to decline 0.59%. The rupee hit a five-month low, while bond yields rose post-announcement.
Nifty, Sensex End Lower Amid RBI Rate Hike, Rupee Hits 5-month Low
Get latest articles and stories on Business at LatestLY. Indian equity markets closed lower on Wednesday as investors turned cautious following the Reserve Bank of India's shift towards calibrated tightening, reflecting concerns over inflation, while the rupee weakened to a five-month low. Business News | Nifty, Sensex End Lower Amid RBI Rate Hike, Rupee Hits 5-month Low.
RBI rate hike shakes Indian markets: Sensex, Nifty end lower amid renewed tightening concerns
The rate decision initially intensified selling across the market. The Sensex and Nifty both fell sharply during the session, but the indices recovered a significant portion of their intraday losses after the policy announcement.
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