Sensex, Nifty Tumble After RBI Holds Rates
Aug 08, 2024 15:59
Indian stock markets fell after the Reserve Bank of India kept interest rates unchanged, citing persistent food inflation. Sensex and Nifty closed nearly 1 percent down.
Mumbai, Aug 8 (PTI) Equity benchmark indices Sensex and Nifty closed nearly 1 per cent down on Thursday after the Reserve Bank of India decided to keep the policy rate unchanged for the ninth time in a row, saying food inflation remains stubborn.
The 30-share BSE Sensex declined by 581.79 points or 0.73 per cent to settle at 78,886.22 in a volatile trade. During the day, it tumbled 669.07 points or 0.84 per cent to 78,798.94.
After a day's breather, the NSE Nifty retreated to close lower by 180.50 points or 0.74 per cent to 24,117. During the day, it tanked 217.8 points or 0.89 per cent to 24,079.70.
The Reserve Bank of India on Thursday expectedly kept the benchmark interest rate and stance unchanged for the ninth straight policy meeting, saying it cannot afford to look through persisting high food inflation and has to remain vigilant to prevent spillover.
Retaining its unambiguous focus on inflation, the Monetary Policy Committee (MPC), which consists of three RBI and three external members, kept the benchmark repurchase or repo rate unchanged at 6.50 per cent.
The panel, whose four-year term ends in October, also decided to retain a policy stance at "withdrawal of accommodation" to aid MPC's focus on bringing inflation towards its 4 per cent target.
Inflation climbed to 5.08 per cent in June, primarily driven by the food component.
RBI Governor Shaktikanta Das said food inflation remains "stubbornly" high.
"RBI MPC is in wait and watch mode and has kept the interest rates unchanged, waiting for clues from the largest Central Bank of the world, the US Federal Reserve, before acting. Stock markets will continue to consolidate in the meanwhile," said Umeshkumar Mehta, CIO, SAMCO Mutual Fund.
Among the 30 Sensex firms, Asian Paints, Infosys, JSW Steel, UltraTech Cement, Power Grid, Larsen & Toubro, HCL Technologies and Tata Steel were the biggest laggards.
Tata Motors, HDFC Bank, Bharti Airtel, ITC, IndusInd Bank and Axis Bank were the gainers.
In Asian markets, Shanghai and Hong Kong settled higher while Seoul and Tokyo ended lower.
European markets were trading in the negative territory. The US markets ended lower on Wednesday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,314.76 crore on Wednesday, according to exchange data.
Global oil benchmark Brent crude declined 0.66 per cent to USD 77.83 a barrel.
On Wednesday, the BSE benchmark rallied 874.94 points or 1.11 per cent to settle at 79,468.01. During the day, it jumped 1,046.13 points or 1.33 per cent to 79,639.20.
The NSE Nifty jumped 304.95 points or 1.27 per cent to 24,297.50. Intraday, it surged 345.15 points or 1.43 per cent to 24,337.70.
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