Sensex Today: The Indian equity markets are trading under pressure today, Wednesday, October 7th, as the Sensex index tumbles significantly after the Reserve Bank of India (RBI) raised its key interest rate by 25 basis points. As per the policy decision, RBI raised its repo rate from 5.25 percent to 5.5 percent and changed its monetary policy outlook from ‘neutral’ to ‘calibrated tightening’. The Sensex index saw significant selling pressure early in the day and fell up to 529 points or 0.7 percent to 72,539.18. But the index soon gained back some ground after seeing recovery in the performance of the financial sector stocks after the RBI’s decision. At 11:06 am IST, the Sensex index was down 0.13 percent at 72,976.86, whereas the Nifty index was down 0.33 percent at 22,701.30.
Sensex Today: Why Is India’s Stock Market Down Today?
The Sensex is facing pressure due to the unexpected tightening of monetary policy by RBI, increased crude oil price, and foreign investors’ selling. The increased cost of borrowing due to higher interest rates and pressure on interest-sensitive companies are factors that may cause problems for businesses. The Brent crude increased by about 1% to $101.5 per barrel amid geopolitical and weather-related risks in the oil market. High oil prices along with inflationary pressure and tight monetary policy have forced investors to be wary. The foreign funds are also a major source of concern. FII sold Indian stocks worth ₹2,961.30 crore, while the DII purchased Indian stocks worth ₹5,088.92 crore.
RBI Monetary Policy: Rates Raised by 25 Bps, Repo Rate Now at 5.5%
The six-member Monetary Policy Committee of RBI increased the repo rate by 25 bps to 5.50%. This marks the first repo rate increase since February 2023. Further, the committee changed the monetary stance to “calibrated tightening,” implying a more aggressive approach towards controlling inflation with respect to growth concerns.
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