Sensex and Nifty extended losses in the afternoon session today after RBI governor Shaktikanta Das announced a hike in repo rate by 40 bps to an unscheduled announcement. The repo rate now stands at 4.40 per cent. The RBI had kept the repo rate unchanged at 4 per cent since May 2020. RBI also announced a hike in cash reserve ratio to 4.5 percent from the earlier 4 percent. Sensex crashed 904 points to 56,071 and Nifty fell 291 points to 16,777.
Before the repo rate hike announcement, Sensex lost 643 points to 56,332 and Nifty slipped 147 points to 16,921. Consumer durables shares were the top losers with their BSE index falling 1267 points to 40,389.
All 19 sectoral indices were trading in the red. The BSE bankex fell 464 points to 41,068. BSE pharma index was also among the top sectoral losers, declining 544 points to 23,604.
Bank Nifty too slumped 467 points to 35,696 post the rate hike announcement.
AR Ramachandran, Co-founder & Trainer, Tips2Trades said, "As expected, an RBI interest rate hike of 25-50 basis points was long overdue considering extremely high inflation levels. Initially, markets could be bearish as it impacts investors' saving and investment cycle but from a long-term perspective, it should allow banks and NBFCs more room for better margins and growth in the coming quarters. Technically, below 35,500 support, Nifty Bank could slip to 35,000. Also, a close below 16,850 could lead to Nifty sliding to 16,600 in the very near term."
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today