Ahead of the RBI policy announcement, markets decline in early trading; the Sensex falls by roughly 200 points
In the face of subdued global trends and rising crude oil prices, investors were cautious ahead of the RBI’s interest rate announcement, and benchmark stock indexes, the Sensex and Nifty, withdrew from their all-time highs and opened the day lower.
The decision will be made public on Friday by the six-member rate-setting panel, which started deliberations on Wednesday.
The 30-share BSE Sensex plummeted to 74,031.14, down 196.49 points, or 0.25 percent. In addition, the larger NSE Nifty fell by 72.85 points, or 0.32 percent, to 22,441.80.
Out of the Sensex members, Tech Mahindra, JSW Steel, L&T, Tata Steel, and Axis Bank were the top losers, with 24 companies trading in the red.
Strong sales were also recorded by Wipro, Bajaj Finance, TCS, and Tata Motors.
Nevertheless, several companies—like Mahindra & Mahindra, Bajaj Finserve, Nestle India, and HDFC Bank—defied the trend and saw advances in their trading.
As many as 38 equities were in the negative zone and 12 shares were in the green on the 50-share barometer NSE Nifty.
The Middle East conflicts have caused Brent crude to surge to USD 91, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. If oil prices continue to rise, India may face macroeconomic challenges.
He said, “amidst market weakness, banking stocks provide opportunities to buy.” “It is possible that the exuberant Indian investors, known as Domestic Institutional Investors (DIIs), flush with money, may ignore the headwinds and buy the dips imparting resilience to the market,” he said.
In the meanwhile, the benchmark for world oil, Brent crude, increased 0.35 percent to USD 90.97 per barrel.
Asian markets were trading down, with Hong Kong’s Hang Seng falling 0.69 percent and Japan’s Nikkei 225 shedding 2.42 percent. Additionally, the South Koran index, or Kospi, was down 0.89 percent.
The European markets had a mixed finish to the day on Thursday. The CAC40 of France fell, while the DAX of Germany and the FTSE 100 of London gained.
On Thursday, the US markets ended the day mostly down.
According to exchange statistics, foreign institutional investors (FIIs) offloaded stocks on Thursday for a total of Rs 1,136.47 crore.
The benchmark Sensex of the BSE increased by 350.81 points, or 0.47 percent, on Thursday, reaching a record high of 74,227.63. Another new high for the NSE Nifty was reached at 22,514.65, up 80 points, or 0.36 percent.
