Equity benchmarks extended their decline for the fourth straight session on Wednesday, with the Sensex falling 214.85 points after the Reserve Bank raised the key interest rate by 50 basis points.
Continuous foreign fund outflows and surging crude oil prices also weighed on markets.
The 30-share BSE benchmark dropped 214.85 points or 0.39 per cent to settle at 54,892.49. During the day, the benchmark hit a high of 55,423.97 and a low of 54,683.30.
The broader NSE Nifty declined 60.10 points or 0.37 per cent to finish at 16,356.25.
Home, auto and other loan EMIs will rise after the Reserve Bank of India (RBI) on Wednesday raised the key interest rate by 50 basis points, the second increase in five weeks, to rein in rise in prices that it saw continuing to hurt consumers in the near term.
With inflation persistently hovering above the upper tolerance limit of 6 per cent, the RBI’s six-member rate-setting panel voted unanimously to raise the lending rate of the repurchase (repo) rate by 50 basis points to 4.90 per cent, Governor Shaktikanta Das said.
From the Sensex pack, Bharti Airtel, ITC, Reliance Industries, Asian Paints, IndusInd Bank, ICICI Bank and Kotak Mahindra Bank were the major laggards.
In contrast, Tata Steel, State Bank of India, Dr Reddy’s, Bajaj Finance, TCS and Titan emerged as the gainers.
“RBI’s projections of GDP growth rate of 7.2 per cent and inflation of 6.7 per cent for FY23 reflect a realistic monetary policy. The higher inflation projection indicates that the central bank recognises the seriousness of inflation and the 50 bps repo rate hike is a message that they are determined to anchor inflation expectations.