Indian equity markets ended Wednesday on a weak note after a highly volatile trading session. The Sensex closed at 72,638.70, down 429.11 points, or 0.58%, while the Nifty 50 ended at 22,603.70, lower by 173.05 points, or 0.76%.
The market opened under pressure, with investors adopting a cautious stance ahead of the Reserve Bank of India's monetary policy announcement. The RBI subsequently raised the repo rate by 25 basis points to 5.50%, marking its first rate increase since February 2023. The central bank also changed its policy stance from neutral to calibrated tightening.
The rate decision initially intensified selling across the market. The Sensex and Nifty both fell sharply during the session, but the indices recovered a significant portion of their intraday losses after the policy announcement. Banking and financial stocks showed resilience and helped limit the overall decline.
According to market analysts, sector performance remained mixed today. Automobile, FMCG, real estate and several consumer-oriented stocks faced selling pressure as investors assessed the implications of higher interest rates and elevated crude oil prices. Banking stocks performed relatively better, with selected private and public-sector lenders gaining during the session. Titan was among the notable laggards, while several major banks helped cushion the broader market decline, they reported.
Investor sentiment was also affected by crude oil prices remaining above the USD 100-per-barrel level, continued foreign portfolio outflows and weakness in the rupee. These factors increased concerns about inflation and the possibility of a prolonged period of tighter monetary policy.
The broader market also displayed weakness, although the decline was less uniform than in the benchmark indices. Market breadth remained cautious, reflecting selective buying rather than broad-based risk appetite.