Indian equity benchmark indices ended lower on Wednesday, snapping a two-session winning streak after the Reserve Bank of India (RBI) raised the repo rate by 25 basis points to 5.5 per cent and shifted its monetary policy stance to “calibrated tightening”, dampening investor sentiment.
The Sensex declined 429.11 points, or 0.59 per cent, to close at 72,638.70, while the Nifty fell 173.05 points, or 0.76 per cent, to settle at 22,603.05.
Investors remained cautious after the RBI’s decision, which signalled a tighter interest rate environment going forward. The move raised concerns over borrowing costs, liquidity conditions and the potential impact of higher rates on economic growth and corporate earnings.
Nifty slips below 22,650
On the technical front, market experts said the Nifty fell below the 22,700 level and closed near the important 22,600 support.
“A sustained break below this level could reopen downside towards 22,400, while 22,800 is now the first recovery hurdle,” market watchers said.
The movement around these levels is expected to remain important for investors as the market assesses the impact of the RBI’s policy decision.
Metal stocks drag market
Among the Nifty constituents, Titan Company, BEL and Hindalco Industries emerged as the top laggards and weighed on the benchmark indices.
Selling pressure was particularly visible in metal stocks, dragging the broader market lower. The Nifty Metal index emerged as the worst-performing sectoral gauge of the day as investors pared exposure to metal counters.
In the broader market, the Nifty MidCap 100 index declined 0.63 per cent, reflecting weakness in mid-sized stocks. However, the Nifty SmallCap 100 index gained 0.30 per cent, bucking the broader trend.
The Nifty PSU Bank index was among the better-performing sectoral gauges and ended in positive territory, providing some support to the market.
What investors will watch next
Market participants are likely to closely monitor the impact of the RBI’s policy measures on economic growth, liquidity conditions and corporate earnings in the coming months as the central bank focuses on containing inflationary pressures.
Looking ahead, attention is expected to shift towards the September-quarter earnings season, which could provide further direction to the market.
Analysts said that while a resilient macroeconomic backdrop supports expectations, investors will closely watch management commentary for signs of whether companies can absorb rising input costs, maintain pricing power and sustain demand through the second half of the fiscal year.