By Siddhant Mishra
Indian equities declined for the fourth straight session on a day when the Reserve Bank of India hiked the repo rate by 35 bps to 6.25%, the highest since August 2018.
The benchmark indices traded largely flat in early trade but declined towards the end of the session, dragged by realty, IT, and auto stocks.
Banking stocks were a mixed bag. The Sensex fell 215.68 points, or 0.34%, to 62,410.68, while the Nifty slid 82.25 points or 0.44% to close at 18,560.50.
The BSE Realty index led the fall, down 1.11%, with Sobha down 5.6% and Oberoi Realty losing 3.6%. Godrej Properties, Sunteck, DLF, and Brigade all closed in the red, with Prestige and Lodha the only ones to end in the green.
Deven Choksey, Promoter of KRChoksey Group, said the markets remained largely muted given that the rate hike was just a confirmation of what was expected. “In the near term, there might be some profit-booking, after which we may see a rally,” he said.
Choksey added that the credit policy will hardly have an impact hereon, because the demand scenario is still buoyant.
Regarding IT stocks, he pointed out that any drop in prices offers a good buying opportunity.
Index heavyweight Reliance Industries lost 1.43%, while HDFC Bank was down 0.12% and HDFC fell 0.88%. Infosys and TCS lost 0.48% and 0.11%, respectively. Tech Mahindra, Wipro, and HCL Tech all ended in the red. Among auto stocks, Tata Motors lost 1.68% and Maruti 0.69%, while Bajaj Auto, TVS, and Hero MotoCorp all ended in the red.
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The BSE Auto shed 0.76%, while the BSE Teck was down 0.55%.
However, the BSE Bankex was marginally down 0.11%, throwing up a mixed bag. AU Bank topped gains at 3.5%, while Bank of Baroda, Axis, and ICICI Bank closed in the green. On the other hand, HDFC Bank, Kotak Bank, SBI, and IndusInd bank all closed in the red.
A total of 1,478 stocks advanced on the BSE, while 2,038 declined.
The Nifty Realty also led losses among the Nifty sectoral indices, slumping 1.19%, while the Nifty IT shed 0.84% and Nifty Auto 0.8%. The Bank Nifty and Nifty Financial Services were marginally down 0.09% and 0.32%.
“Markets extended losses for the 4th straight session as investors dumped realty and automobile stocks on worries that a higher EMI outgo post the RBI’s repo rate hike could dent demand. Although the rate hike came on expected lines, the RBI is showing no signs of letting off in its fight against inflation. More hikes could be in the offing, which could hurt growth,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
DIIs were net buyers for up to `389 crore, while FIIs turned net sellers to the tune of Rs 1,242 crore.