In the latest share market update, the local stock markets witnessed a significant decline amidst the Reserve Bank of India’s decision to maintain the policy interest rate unchanged.
Profit booking in vehicle, bank, and information technology stocks halted the four-day rally, leading both major indices to fall by around half a percent.
BSE’s benchmark index, Sensex, remained positive for most of the trading session but eventually dropped 294.32 points or 0.47 percent to close at 62,848.64.
At one point during the trading, the Sensex experienced a decline of 353.23 points. The Nifty of the National Stock Exchange (NSE) also closed with a loss of 91.85 points, or 0.49 percent, at 18,634.55 points.
Stock Declines and Gains
Several companies included in the Sensex witnessed declines, with Kotak Mahindra Bank experiencing the highest decline of 2.68 percent.
Other companies, such as Tech Mahindra, Mahindra & Mahindra, Axis Bank, Hindustan Unilever, Tata Motors, Tata Consultancy Services, Bajaj Finserv, Bajaj Finance, Nestle, and Titan, also faced declines.
However, shares of NTPC, Power Grid, Larsen & Toubro, HDFC, Reliance, and HDFC Bank registered gains.
Reserve Bank’s Monetary Policy Decision
The direction of the domestic stock markets was influenced by the Reserve Bank’s decision to maintain the repo rate at 6.5 percent during its second consecutive bi-monthly review meeting.
Although the repo rate remained unchanged, inflation continues to remain a concern for the Reserve Bank.
Dhiraj Relli, CEO of HDFC Securities, stated, “The decision to keep the repo rate constant was in line with market expectations.
With better-than-expected economic growth figures and softening on the inflation front, the Monetary Policy Committee had room for this decision.”
Foreign Markets and Investor Activity
In other Asian markets, South Korea’s Kospi and Japan’s Niki experienced losses, while China’s Shanghai Composite and Hong Kong’s Hangseng closed with gains.
European markets were trading with gains in the afternoon session. The American markets witnessed a significant decline on the previous day.
Brent crude, the international oil standard, fell 0.31 percent to $76.71 per barrel. Foreign institutional investors continued to make purchases in the Indian market, with net purchases of shares worth Rs 1,382.57 crore on Wednesday, as per exchange data.
Despite the recent decline, market dynamics remain subject to various factors, both domestic and international, and investors continue to monitor the developments closely.
