MUMBAI: On Wednesday, Indian equity indices, namely the BSE Sensex and NSE Nifty, exhibited a noteworthy shift as early gains dissipated; culminating in a decline attributed to late selling pressures from major constituents such as Reliance Industries, ITC, and HDFC Bank.
The market behaviour unfolded even as the Reserve Bank of India (RBI) signaled a pivotal change in its monetary policy stance, easing toward a rate cut.
At the close of trading, the 30-share BSE Sensex had retreated by 167.71 points, or 0.21 per cent, settling at 81,467.1.
Earlier in the session, the index had demonstrated significant momentum, ascending by 684.4 points, peaking at an intraday high of 82,319.21.
Similarly, the NSE Nifty experienced a decline of 31.20 points, or 0.12 per cent, concluding at 24,981.95 after reaching 25,234.05 at its highest point during the day.
In the context of monetary policy, the RBI maintained its benchmark repo rate at 6.5 per cent, marking the tenth consecutive policy meeting without alteration.
Asian stocks down
However, the central bank’s transition from a hawkish to a neutral stance has sparked speculation regarding potential future rate cuts. This shift was endorsed by a vote of five to one within the monetary policy committee.
The performance of individual stocks within the Sensex reflected a mixed sentiment, with companies such as ITC, Nestle India, and HDFC Bank underperforming, while Tata Motors, Tech Mahindra, and Bharti Airtel saw gains.
Market analysts noted that the upward revision in inflation forecasts for Q3FY25 posed a concern for the RBI, prompting profit-booking amongst investors as the trading session progressed.
Moreover, foreign institutional investors demonstrated a bearish outlook, offloading equities worth Rs5,729.60 crore, while domestic institutional investors countered this trend with purchases amounting to Rs7,000.68 crore.
As a consequence, the volatility in input prices and its adverse effect on margins continued to weigh heavily on consumer goods stocks.
In a broader context, Asian markets reflected mixed performances, with notable declines in Shanghai, Hong Kong, and Seoul, juxtaposed against a positive showing in Tokyo. Meanwhile, European markets exhibited upward momentum, indicative of a divergent trend outside the Indian market.
The recent movements in the equity indices underscore a complex interplay between investor sentiment, macroeconomic indicators, and monetary policy recalibrations. As the RBI assesses the evolving economic landscape, market participants remain vigilant, anticipating further policy adjustments that may influence trading dynamics in the weeks to come.
