Sensex And Nifty 50 Down Today: Stock markets of India are trading negatively on Wednesday, October 7, after the Reserve Bank of India’s hike in its rates, along with increased prices of crude oil and the selling pressure by foreign institutional investors (FIIs).
Why Is Indian Stock Market Down Today?
Sensex and Nifty indices have fallen in today’s opening trade, with rate-sensitive stocks being hit the hardest. The negative performance comes following a positive rally in the last trading day, where the Sensex index was seen rising by 685.34 points or 0.95% to end its day at 73,067.81, and the Nifty index climbed 220.35 points or 0.98% to settle down at 22,776.10.
RBI Monetary Policy: Rates Raised by 25 Bps, Repo Rate Now at 5.5%
The RBI has increased its benchmark repo rate by 25 basis points to 5.50%. This is the first rate hike by the RBI since February 2023.
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The Monetary Policy Committee has increased the rate unanimously and also changed its policy stance to “calibrated tightening” from “neutral.” The change in stance indicates that the RBI is beginning to take more actions regarding curbing inflation as inflation pressures grow stronger.
This is in response to the rise in consumer inflation to 4.82% in August, which has been exceeding the RBI’s target of 4% for three months now due to higher energy and food prices and geopolitics.
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