Sensex falls 216 pts, Nifty below 18,600 on RBI's moderately hawkish policy

CLOSING BELL: The central bank increased repo rate by 35 basis points and lowered GDP growth forecast for FY23 to 6.8 per cent as it remained cautious of a sticky core inflation amid global turmoil

Sensex falls 216 pts, Nifty below 18,600 on RBI's moderately hawkish policy

CLOSING BELL

Stock market highlights: The Reserve Bank of India's moderately hawkish monetary policy aggravated profit booking on Dalal Street on Wednesday. The central bank increased repo rate by 35 basis points and lowered gross domestic product (GDP) growth forecast for FY23 to 6.8 per cent as it remained cautious of a sticky core inflation amid global turmoil.

Governor Shaktikanta Das said that the monetary policy committee (MPC) had retained its inflation forecast for the current financial year at 6.7 per cent. It, however, has made mild upward revisions to the inflation forecasts for the current quarter and the next quarter.

"The medium-term inflation target is exposed to heightened uncertainties…further calibrated monetary policy action is warranted to keep inflation expectations anchored, break the core inflation persistence and contain second-round effects," Das said. READ MORE

This, coupled with global weakness, pushed the benchmark S&P BSE Sensex index 216 points, or 0.34 per cent, lower at 62,411. The Nifty50, too, ended below the 18,600-mark at 18,560.5, down 82 points or 0.44 per cent.

In the broader market, the BSE MidCap and SmallCap indices fell in tandem with the frontline indices and slipped about 0.4 per cent each.

Sectorally, the Nifty FMCG index settled 0.96 per cent higher, after hitting fresh record high in the intra-day trade, after the Reserve Bank of India governor Shaktikanta Das said that going into October-December quarter of financial year 2022-23 (Q3FY23), economic activity seems to have gained strength in October. READ MORE

That apart, the Nifty PSU Bank index, too, ended higher after the RBI extended the dispensation of an enhanced limit of the held-to-maturity (HTM) portfolio for government bonds till March 31 next year, enabling banks to better manage their investment portfolios. READ MORE

Rate sensitives :: Time to stay selective

Among individual stocks, Larsen & Toubro can rally to Rs 2,500-mark. Whereas, SBI and DLF need to conquer the near resistance zone. READ MORE

4:04 PM

COMMENT:: With focus on inflation, rates likely to increase in future too

"As the economy deals with the global headwinds, the RBI has become more realistic, lowering FY23 GDP growth forecast from 7% to 6.8%. The focus remains on fighting inflation which will lead to increase in interest rates in future. Along with a global slowdown corporate earnings forecast for H2FY23 & FY24 can downgrade. The market is currently trading at premium valuations, a slowing earnings growth will impact market sentiment."

- Vinod Nair, Head of Research at Geojit Financial Services.

4:02 PM

FMCG index hits record high in range-bound market; Dabur, HUL up 2%

Shares of fast moving consumer goods (FMCG) companies were trading firm in an otherwise range-bound market with the Nifty FMCG and the S&P BSE FMCG indices hitting their respective record highs on Wednesday. The gains came on the back of expectation of volume recovery, going forward, driven by recovery in rural demand. READ MORE

3:59 PM

Larsen & Toubro market-cap crosses Rs 3 trillion; stock hits new high

L&T is the best proxy for domestic capex given its market leadership in the engineering and construction industry, diversified revenue stream and strengthening balance sheet. READ MORE

3:57 PM

HDFC AMC gains nearly 4% as promoter abrdn plans to sell entire 10.2% stake

abrdn Investment Management is to place up to 21.12 million shares (i.e. 9.9 per cent) with a single buyer with the rest being sold separately, subject to feasibility. READ MORE

3:56 PM

Jindal Stainless surges 16% in two days after Quant MF buys 2.6 mn shares

On December 6, Quant Mutual Fund - Small Cap Fund purchased 2.63 million shares representing 0.52 per cent of the total equity of Jindal Stainless at Rs 182.97 apiece on the NSE. READ MORE

3:54 PM

Craftsman Automation jumps 4% in intraday deals, after Marina III Singapore sells entire 5.5% stake

India Acorn Icav (333,363 shares), Abu Dhabi Investment Authority (240,300 shares) and White Oak Capital Management Consultants LLP (128,959 shares) bought more than 100,000 shares of the company. READ MORE