At 9.25 AM, Sensex dropped over 450 points to fall below 72,600 while Nifty 50 declined over 150 points to trade below 22,650. Broader markets were mixed, with Nifty Midcap 100 in the red and Nifty Smallcap 100 in the green.
Titan shares plunged more than 4% after the company’s Q2 business update failed to impress the market. Asian Paints, BEL, Maruti Suzuki, M&M, Tata Steel, Infosys, TCS, L&T, Axis Bank, UltraTech Cement, Reliance Industries, HUL, Trent, Bajaj Finserv, HCL Tech, Adani Ports, ITC, Power Grid, Tech Mahindra and SBI shares meanwhile dropped around 1% each to emerge as the other top losers on Sensex. Bucking the trend, Bharti Airtel and Bajaj Finance shares traded around 1% higher.
Most of the sectoral indices slipped into the red, with Nifty Auto, Nifty Metal and Nifty Consumer Durables falling more than 1% each. The overall market breadth turned negative, with NSE seeing 1,661 declines against 1,142 advances, while 114 stocks remained unchanged.
Will RBI hike rates today?
RBI Governor Sanjay Malhotra is likely to announce the MPC’s decision to hike rates today, marking RBI's first rate increase in nearly four years. Analysts however believe that the stock market may not be sharply impacted by it after the recent selloff as the hike has already been priced in.Not rate hike, but RBI’s guidance is what the stock market is really waiting for, said Tanvi Kanchan, Associate Director at Anand Rathi Shares & Stock Brokers. “If the RBI keeps its stance neutral and frames this as a pre-emptive move against imported inflation, markets can live with it. A shift in stance that signals a cycle would be a different conversation,” the analyst said.
The bigger point is that the central bank’s rate decision isn't what's driving this market. Eight straight weeks of losses have come from forces outside India's control, with US 10-year yields above 5.25%, Brent back above $100, and a rupee near 96 to the dollar, Kanchan pointed out. Those three are what keep foreign investors selling, and a domestic rate hike doesn't change any of them. If anything, a hike that defends the rupee could slow the outflows at the margin.
Add as a Reliable and Trusted News Source Add Now!
(You can now subscribe to our ETMarkets WhatsApp channel)