Sensex sheds 429 pts as RBI’s hawkish pivot dents mood

Mumbai: Stock markets closed lower on Wednesday, with the benchmark Sensex down 429 points after two straight days of gains, as the RBI raised the key policy rate for the first time in nearly four years. Snapping the two-day rally, the 30-share BSE Sensex fell 429.11 points, or 0.59 per cent, to settle at 72,638.70 with 26 of its constituents closing lower and four higher.

During the day, Sensex lost 599.09 points, or 0.81 per cent, to hit a low of 72,468.72. The 50-share NSE Nifty declined 173.05 points, or 0.76 per cent, to end at 22,603.05. Rising crude oil prices and persistent foreign fund outflows also hit market sentiment, analysts said. Among the 30 Sensex firms, Titan, Bharat Electronics, Asian Paints, Infosys, Larsen & Toubro and Adani Ports were the major laggards. Kotak Mahindra Bank, Bharti Airtel, ICICI Bank and Bajaj Finance were the gainers.

Brent crude, the global oil benchmark, jumped 1.41 per cent to USD 102 per barrel. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,961.30 crore on Tuesday, according to exchange data. “With the RBI delivering the rate hike on expected lines, the domestic market reacted more sharply to the shift in policy stance from neutral to calibrated tightening, which signals a turn in the rate cycle.

“While the upward revision to growth projections reaffirmed the strength of domestic fundamentals, the higher inflation outlook and the RBI’s emphasis on price stability tempered sentiment,” Vinod Nair, Head of Research, Geojit Investments Limited, said.