Indian stock markets closed lower on Wednesday after the Reserve Bank of India kept the key repo rate unchanged. BSE Sensex lost 205.26 points or 0.63% to settle at 32,597.18 whereas NSE Nifty tripped 74.15 points or 0.73% to conclude at 10,044.1. During the day, the benchmark Sensex fell 237.28 points to hit the day’s low of 32,565.16 while the broader Nifty dropped 84.9 points to mark the day’s low at 10,033.35. In a major development today, the Reserve Bank of India kept the repo rate unchanged at 6% in its latest credit and monetary policy review, as was widely expected given the concerns on the rising headline inflation and firm global crude oil prices. The RBI’s 6% repo rate, last revised in August, is lowest in seven years since November 2010.
Shares of Sun Pharma, SBI, ICICI Bank, HDFC, Bajaj Auto and ONGC were the major laggards today, lost up to 2.31% while RIL, Maruti Suzuki, HUL and Infosys gained up to 1.76%. The heavyweight stocks of companies such as HDFC, HDFC Bank, ICICI Bank, SBI, ITC, L&T, Sun Pharma, Tata Motors contributed the most to the Sensex decline. Collectively, these eight stocks alone washed off about 237 points from the Sensex while an upmove in RIL, Maruti Suzuki and Infosys trimmed further losses, adding 85 points to the index.
The GVA (gross value added) forecast for FY18 also kept unchanged at 6.7%. RBI maintains status quo; repot rate unchanged at 6%, reverse repo rate at 5.75%, bank rate at 6.25%. “On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.0 per cent,” the central bank said in its policy statement.
The central bank kept the policy stance neutral with the objective of limiting the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of plus/minus 2%, while supporting growth. “The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth,” the RBI said in its policy statement on Wednesday.