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Sensex, Nifty drop nearly 1% after RBI holds policy rate

Equity indices Sensex and Nifty fell nearly 1% on Thursday after the RBI held the policy rate steady for the ninth consecutive time, citing persistent food inflation. Sensex dropped 581.79 points to 78,886.22, while Nifty declined 180.50 points to 24,117.

News Arena Network - Mumbai - UPDATED: August 8, 2024, 04:38 PM - 2 min read

Sensex, Nifty drop nearly 1% after RBI holds policy rate

The 30-share BSE Sensex dropped 581.79 points, or 0.73%, to close at 78,886.22 in volatile trading. It fell as much as 669.07 points, or 0.84%, during the session to hit 78,798.94.

Equity benchmark indices Sensex and Nifty closed nearly 1% lower on Thursday after the Reserve Bank of India (RBI) opted to keep the policy rate unchanged for the ninth consecutive time, citing persistent food inflation.

The 30-share BSE Sensex fell by 581.79 points, or 0.73%, to close at 78,886.22 in volatile trading. It had earlier plunged 669.07 points, or 0.84%, to hit a low of 78,798.94 during the session.

The NSE Nifty also retreated, closing down by 180.50 points, or 0.74%, at 24,117. During the day, it dropped 217.8 points, or 0.89%, to touch 24,079.70.

The RBI's Monetary Policy Committee (MPC) kept the benchmark repurchase, or repo rate, steady at 6.50% and retained its stance of "withdrawal of accommodation" to maintain its focus on reducing inflation towards the 4% target. This decision came amid concerns over stubbornly high food prices, with inflation climbing to 5.08% in June.

RBI Governor Shaktikanta Das emphasised that food inflation remains "stubbornly" high, necessitating vigilance to prevent any spillover effects.

"RBI MPC is in wait-and-watch mode and has kept interest rates unchanged, awaiting signals from the US Federal Reserve before taking further action. Stock markets will likely consolidate in the meantime," said Umeshkumar Mehta, CIO of SAMCO Mutual Fund.

Among the 30 Sensex constituents, Asian Paints, Infosys, JSW Steel, UltraTech Cement, Power Grid, Larsen & Toubro, HCL Technologies, and Tata Steel were the top losers. Meanwhile, Tata Motors, HDFC Bank, Bharti Airtel, ITC, IndusInd Bank, and Axis Bank ended in the green.

In Asian markets, Shanghai and Hong Kong closed higher, while Seoul and Tokyo finished lower. European markets were trading in negative territory, and US markets closed 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 fell 0.66% to USD 77.83 a barrel.

On Wednesday, the BSE Sensex had surged by 874.94 points, or 1.11%, to close at 79,468.01, with an intraday jump of 1,046.13 points, or 1.33%, to 79,639.20. The NSE Nifty had gained 304.95 points, or 1.27%, to settle at 24,297.50, after an intraday surge of 345.15 points, or 1.43%, to 24,337.70.