Stories
Sensex Drops 429 Points and Nifty Sinks Below 22,650 Amid RBI Rate Hike
- •The BSE Sensex closed 429.11 points lower at 72,638.70 and the NSE Nifty ended down 173.05 points at 22,603.05.
- •The Reserve Bank of India raised the repo rate by 25 basis points to 5.50 percent and shifted to a calibrated tightening stance.
- •Market sentiment was further dampened by surging crude oil prices above $100 a barrel and persistent foreign institutional investor selling.
- •A late recovery in banking and financial stocks helped indices rebound significantly from their lowest intraday levels.
- •Nifty Metal and Nifty Realty led the sectoral losses, while Nifty PSU Bank and Nifty Media managed to post gains.
Key Questions Answered
Domestic equity markets closed lower as investors reacted to the Reserve Bank of India raising the repo rate by 25 basis points to 5.50% and shifting to a calibrated tightening stance. Additional pressures included elevated crude oil prices trading above $100 a barrel, a weaker rupee, and persistent foreign institutional investor selling.
The market recovery in the second half of the session was driven by a strong rebound in banking and financial stocks as investors reassessed the immediate impact of the RBI rate hike. The absence of additional liquidity-tightening measures also helped alleviate funding cost concerns, pushing the Nifty Bank, Nifty Private Bank, and Nifty PSU Bank into positive territory.
Selling pressure was broad-based across several sectors, with Nifty Metal dropping 2.33%, Nifty Realty falling 1.77%, and Nifty Auto declining 1.58%. Conversely, pockets of the market showed resilience, led by Nifty PSU Bank gaining 1%, Nifty Media rising 0.69%, and the Nifty Smallcap 100 adding 0.30%.
