RBI Rate Hike Rattles Dalal Street, Sensex Sinks 429 Points As Nifty Slips Below 22,650

Mumbai: Indian equity benchmarks ended sharply lower on Wednesday, snapping a two-session winning streak as the Reserve Bank of India’s rate hike and shift towards tighter monetary policy weighed on investor sentiment.

The Sensex dropped 429.11 points, or 0.59 percent, to settle at 72,638.70. The Nifty declined 173.05 points, or 0.76 percent, to close at 22,603.05.

RBI Move Spooks Investors

The RBI raised the repo rate by 25 basis points to 5.5 percent and shifted its monetary policy stance to “calibrated tightening”, signalling a tougher approach towards inflation.

The decision raised concerns over borrowing costs, liquidity conditions and the possible impact of higher interest rates on economic growth and corporate earnings.

Among Nifty stocks, Titan Company, BEL and Hindalco Industries were major laggards. Metal counters witnessed particularly strong selling pressure.

Nifty Tests Key Support

Market experts said the Nifty slipped below 22,700 and finished close to the crucial 22,600 support level.

A sustained break below 22,600 could open the door for a further decline towards 22,400. On the upside, 22,800 is now seen as the first major hurdle for any recovery.

Broader markets displayed a mixed trend. The Nifty MidCap 100 declined 0.63 percent, while the Nifty SmallCap 100 bucked the weakness and gained 0.30 percent.

Metal Stocks Drag, PSU Banks Shine

Sectorally, Nifty Metal emerged as the worst performer as investors reduced exposure to metal companies. In contrast, the Nifty PSU Bank index ended higher and provided some support to the broader market.

Investors will now shift their attention to the September-quarter earnings season for fresh market direction.

Analysts said management commentary will be closely tracked to assess whether companies can manage rising input costs, retain pricing power and sustain consumer demand during the second half of the financial year.

The market will also closely monitor how the RBI’s tighter policy affects liquidity, economic growth and corporate profitability in the coming months.