Indian equity markets closed on a weak note following the Reserve Bank of India’s (RBI) decision to keep the policy repo rate unchanged at 6.5%. The benchmark indices opened lower and continued to trade in negative territory throughout the day.
The BSE Sensex ended the session down 582 points, or 0.75%, at 78,873, while the NSE Nifty 50 fell 180 points, or 0.81%, to close at 24,100.50.
Despite the broader market downturn, some stocks managed to close in the green. HDFC Life, Tata Motors, HDFC Bank, SBI Life Insurance, and Cipla were among the gainers. Conversely, LTIMindtree, Grasim Industries, Asian Paints, Infosys, and Apollo Hospitals saw declines.
The BSE MidCap and SmallCap indices bucked the trend, recording gains of 0.36% and 0.76%, respectively.
Investor sentiment was notably influenced by the RBI’s cautious stance amid ongoing economic uncertainties. This marks the ninth consecutive time the central bank has opted to maintain stability in its monetary policy, despite ongoing inflation concerns. Inflation continues to hover above the RBI’s target range, contributing to the cautious approach.
“The market is currently displaying weak sentiments due to several factors, including geopolitical concerns, inflationary pressure, and unemployment. These issues are likely to continue affecting market sentiment,” said VLA. Ambala, a research analyst and co-founder of Stock Market Today (SMT).
Ambala added that the RBI also expressed concerns about a potential recession and persistent inflation. The decision to keep the repo rate unchanged underscores these concerns.
The GDP forecast for Q1FY25 has been revised downward from 7.3% to 7.1%, with the FY25 forecast remaining at 7.2%. Inflation expectations for Q2 and Q3FY25 have been raised to 4.4% and 4.7%, respectively, while the Q4 forecast has been reduced to 4.3%.
Sectoral performance during the trading session was mixed. The Nifty Metal, IT, and Auto indices each declined by up to 1%, while the Nifty Media and Pharma indices posted gains of 0.15% and 0.8%, respectively.
(ani)