The SENSEX Index Closes 0.57% Lower

Indian shares closed firmly lower on Wednesday with broad pressure from most sectors after the Reserve Bank of India raised its benchmark policy rate by 25 bps, as expected. The S&P/BSE Sensex fell 0.6% to 72,639 and the NSE Nifty 50 dropped 0.8% to 22,603. It was the RBI's first rate increase in over three years, warranted by a rebound in the outlook for inflation and mounting pressure on the rupee driven by capital outflows and surging energy import costs. The increase in borrowing costs is likely to weigh on credit demand and impact earnings, with index heavyweights Titan, Asian Paints, Larsen & Toubro, Tata Steel, and Adani Ports falling between 2% and 4%. Tech also fell following a pullback in US equity markets, with Infosys and HCL Tech down around 2% each. On the other hand, state and private banks outperformed, closing near the flatline in aggregate.

The SENSEX Index decreased 419 points or 0.57 percent on Wednesday to close at 72648 points. The decline was led by Titan Company (-4.07%), Indusind Bank (-3.54%) and Asian Paints (-2.27%). On the upside, the strongest performers were Kotak Mahindra Bank (1.88%), Bharti Airtel (1.51%) and ICICI Bank (0.92%).

India’s BSE Sensex fell about 0.6% to 72,635 on Wednesday, reversing gains from the previous session as investors remained cautious following the Reserve Bank of India’s policy decision, with the central bank raising its policy rate by 25 basis points to 5.5%, marking its first rate hike since February 2023. The rate hike came as inflation broadened beyond food and fuel, while higher oil prices added to price pressures. Brent crude traded around $101.70 a barrel as renewed Middle East tensions and a storm threatening US oil production raised concerns over supply disruptions. Among individual stocks, Titan fell about 3.4% after the jewellery retailer reported weaker-than-expected growth in its quarterly business update. Other notable laggards included BSE (-1.5%), HDFC Bank (-0.8%), Reliance (-0.4%), and ICICI Bank (-0.8%). On the upside, Asset Reconstruction Company climbed about 6.8% after its consolidated net profit rose 54.2% year-on-year in the June quarter.