Sensex, Nifty Recover From Day’s Lows After RBI Repo Rate Hike

Benchmark indices Sensex and Nifty recovered significantly from their intraday lows on Wednesday as value buying emerged following eight consecutive weeks of market declines.

At 11 am, the Sensex was down 76.47 points, or 0.1%, at 72,991.34, while the Nifty declined 71.10 points, or 0.31%, to 22,705.

The broader market remained evenly balanced, with 1,798 stocks advancing, 1,809 declining and 172 remaining unchanged.

The Sensex recovered around 450 points from the day's low, while the Nifty moved back above the 22,700 level as investors bought stocks at lower valuations.

Bank Nifty turns positive after RBI policy

Bank Nifty moved into positive territory following the Reserve Bank of India's (RBI) monetary policy announcement.

The Monetary Policy Committee raised the benchmark repo rate by 25 basis points to 5.5% from 5.25%, marking the central bank's first rate increase since February 2023.

The RBI also shifted its monetary policy stance from neutral to calibrated tightening, signalling the possibility of further rate increases.

However, RBI Governor Sanjay Malhotra said the timing and extent of future policy action would depend on actual inflation and economic growth outcomes.

Kotak Mahindra Bank, ICICI Bank and Axis Bank were among the leading gainers on the Nifty.

Rate hike was factored in: Analysts

Analysts said the 25-basis-point repo rate increase had largely been factored into market expectations ahead of the RBI announcement, limiting the immediate negative impact on equities.

Value buying at lower levels also helped the benchmark indices recover after a prolonged period of weakness.

The market had declined for eight consecutive weeks, creating opportunities for investors to accumulate stocks at lower levels.

While the benchmark indices remained in negative territory late in the morning session, their recovery from the day's lows indicated improved buying interest.

Banking stocks provided additional support following the RBI policy announcement, helping the broader market stabilise despite the increase in the benchmark interest rate.