Mumbai. The local stock markets declined on Thursday and the BSE Sensex fell 582 points. The market came down after the Reserve Bank of India (RBI) announced its decision not to change the policy rate repo. In a volatile trade, the BSE Sensex based on 30 shares closed at 78,886.22 points with a fall of 581.79 points or 0.73 percent. During trading, at one time it fell 669.07 points to 78,798.94 points.
NSE Nifty also closed at 24,117 points with a fall of 180.50 points or 0.74 percent. At one point during trading, it had plunged by 217.8 points. According to analysts, domestic stock markets declined due to continued capital withdrawal by foreign institutional investors and weak trend in US and European markets.
Vinod Nair, Head of Research, Geojit Financial Services, said, “The market came down with the announcement of RBI’s monetary policy. Investors adopted a cautious stance in view of the increase in the Consumer Price Index based inflation forecast for the first quarter and economic growth being softer than expected.” The Reserve Bank of India (RBI) on Thursday, as expected, did not change the policy rate repo for the ninth consecutive time in the third bi-monthly monetary policy review of the current financial year and maintained it at 6.5 percent. RBI said that high inflation of food items cannot be ignored and there is a need to be cautious to prevent its impact on other sectors.
Umeshkumar Mehta, Chief Investment Officer (CIO) of Samco Mutual Fund, said, “RBI has kept the policy rate unchanged by adopting a wait and watch policy. RBI is waiting for the signal from the world’s largest central bank, the US Federal Reserve. Amidst all this, the stock markets will continue to remain strong.” Among the 30 companies of Sensex, Asian Paints, Infosys, JSW Steel, UltraTech Cement, Power Grid, Larsen & Toubro, HCL Technologies and Tata Steel were the major losers.
On the other hand, Tata Motors, HDFC Bank, Bharti Airtel, ITC, IndusInd Bank and Axis Bank were among the gainers. The BSE Midcap index, which represents the shares of mid-sized companies, fell by 0.44 percent, while the Smallcap index, which relates to small companies, fell by 0.16 percent. In other Asian markets, China’s Shanghai Composite and Hong Kong’s Hang Seng were in profit, while South Korea’s Kospi and Japan’s Nikkei were in loss. There was a downward trend in major European markets. US markets were in loss on Wednesday.
According to stock market data, foreign institutional investors sold shares worth Rs 3,314.76 crore on Wednesday. Global oil benchmark Brent crude fell 0.66 percent to $ 77.83 per barrel. The BSE Sensex rose 874.94 points on Wednesday while the NSE Nifty rose 304.95 points.