Stock Market: Sensex Plunges 1,307 Points, Nifty Ends Below 16,700 On RBI's Sudden 40 Bps Rate Hike

Stock update: On the BSE, Titan, Bajaj Finserv and Bajaj Finance plunged over 4 per cent each. IndusInd Bank, HDFC Bank, RIL, Asian Paints, and Maruti were the other losers, down over 3 per cent each

Stocks from the midcap and smallcap traded weak as Nifty midcap 100 fell 2.12 per cent and smallcap declined 2.35 per cent. Image: AFP

Source : AFP

New Delhi: The key equity benchmarks, Sensex and Nifty, on Wednesday plunged sharply after the Reserve Bank of India (RBI) announced a surprise repo rate hike in an unscheduled meeting. The central bank raised the policy repo rate under the liquidity adjustment facility (LAF) by 40 basis points to 4.40 per cent to contain inflation with immediate effect to curb inflation.

This sudden move by the RBI has dented investors’ sentiment. On the side of the RBI development, the markets are anticipating another rate hike by the US Federal Reserve, which most likely will increase rates by 50 basis points.

The 30-share BSE Sensex sank to a low of 55,502, and eventually ended 1,307 points lower at 55,669, while the broader NSE Nifty tanked 391 points to 16,677.

On the BSE, Titan, Bajaj Finserv and Bajaj Finance plunged over 4 per cent each. IndusInd Bank, HDFC Bank, Reliance Industries, Asian Paints, and Maruti were the other major losers, down over 3 per cent each.

On the flipside, PowerGrid Corporation and NTPC settled in the positive zone.

Stocks from the midcap and smallcap traded weak as Nifty midcap 100 fell 2.12 per cent and smallcap declined 2.35 per cent.

On NSE, all of the 15 sector gauges were trading in the red. Nifty Consumer Durables, Nifty Metal, and Nifty Financial Services were underperforming the index by falling as much as 3.62 per cent, 3.21 per cent, and 2.61 per cent, respectively.

On the other hand, Life Insurance Corporation (LIC’s) mega IPO opened for subscription on Wednesday. As of 03:30 pm, the issue was subscribed 50 per cent, with the policyholder and employee categories witnessing highest subscription at 1.68 times and 89 per cent, respectively. The retail quota had received bids for up to 52 per cent of the limit.

In Asian markets, Seoul and Hong Kong ended trade in negative territory. Europe was also trading lower during the afternoon session.

In the US, stock exchanges rose in trade on Tuesday.

Meanwhile, international oil benchmark Brent crude jumped 3.12 per cent to $108.3 per barrel.

According to stock exchange data, foreign institutional investors (FIIs) on Monday diluted shares worth Rs 1,853.46 crore.