RBI Rate Hike Triggers Market Sell-Off; Sensex Falls 429 Points, Nifty Near 22,600

Indian equity markets ended lower on Wednesday, October 7, snapping a two-session winning streak after the Reserve Bank of India (RBI) raised the repo rate by 25 basis points to 5.5% and shifted its monetary policy stance to “calibrated tightening”. The move weighed on investor sentiment and pushed the benchmark indices lower.

The Sensex fell 429.11 points, or 0.59%, to close at 72,638.70, while the Nifty 50 declined 173.05 points, or 0.76%, to settle at 22,603.05.

Nifty Nears Key Support Level

Market experts said the Nifty slipped below 22,700 and ended close to the important 22,600 support level.

A sustained break below 22,600 could open the way for a decline towards 22,400, while 22,800 has emerged as the immediate recovery hurdle, according to market watchers.

Investors remained cautious after the RBI’s rate decision, with expectations of tighter financial conditions weighing on market sentiment.

Metal Stocks Face Heavy Selling

Among Nifty stocks, Titan Company, Bharat Electronics (BEL) and Hindalco Industries were among the biggest laggards.

Metal stocks faced notable selling pressure, making the Nifty Metal index the worst-performing sectoral gauge of the day.

In the broader market, the Nifty MidCap 100 declined 0.63%, while the Nifty SmallCap 100 bucked the trend to gain 0.30%.

The Nifty PSU Bank index was among the better-performing sectoral indices and ended higher, offering some support to the broader market.

Earnings Season In Focus

Market participants are now expected to track the impact of the RBI’s policy measures on economic growth, liquidity and corporate earnings.

Analysts said the September-quarter earnings season could provide the next major trigger for the market. While a resilient macroeconomic environment has supported expectations, investors are likely to focus on management commentary around rising input costs, pricing power and demand during the second half of the financial year.