Sensex, Nifty decline nearly 1% as RBI retains policy stance

Mumbai: Equity benchmark indices Sensex and Nifty closed nearly 1 per cent down on Thursday after the Reserve Bank of India decided to keep the policy rate unchanged for the ninth time in a row and termed food inflation “stubborn”.

The 30-share BSE Sensex declined by 581.79 points or 0.73 per cent to settle at 78,886.22 in a volatile trade. During the day, it tumbled 669.07 points or 0.84 per cent to 78,798.94.

The NSE Nifty declined by 180.50 points or 0.74 per cent to close at 24,117. During the day, it tanked 217.8 points or 0.89 per cent to 24,079.70.

Analysts said continuous foreign fund outflows and weak trends in the US and European markets drove domestic equities lower.

The RBI on Thursday expectedly kept the benchmark interest rate and stance unchanged for the ninth straight policy meeting, saying it cannot afford to look through persisting high food inflation and has to remain vigilant to prevent spillover. Retaining its unambiguous focus on inflation, the Monetary Policy Committee (MPC), which consists of three RBI and three external members, kept the benchmark repurchase or repo rate unchanged at 6.50 per cent.

Among 30 Sensex firms, Asian Paints, Infosys, JSW Steel, UltraTech Cement, Power Grid, Larsen & Toubro, HCL Technologies and Tata Steel were the biggest laggards.

Tata Motors, HDFC Bank, Bharti Airtel, ITC, IndusInd Bank and Axis Bank were the gainers.

In the broader market, the BSE midcap gauge declined 0.44 per cent and smallcap index dipped 0.16 per cent.

Among the indices, metal tanked 2.02 per cent. IT (1.82 per cent), utilities (1.62 per cent), commodities (1.45 per cent), teck (1.40 per cent) and realty (1.22 per cent) also declined. Healthcare emerged as the only gainer.

As many as 2,083 stocks declined while 1,829 advanced and 102 remained unchanged.

The rupee consolidated in a narrow range and settled for the day lower by 2 paisa at 83.97 against US dollar on Thursday.

On Wednesday, the BSE benchmark rallied 874.94 points or 1.11 per cent to settle at 79,468.01. During the day, it jumped 1,046.13 points or 1.33 per cent to 79,639.20.

The NSE Nifty jumped 304.95 points or 1.27 per cent to 24,297.50. Intraday, it surged 345.15 points or 1.43 per cent to 24,337.70.