Markets Closing: Sensex Drops 308 Points, Nifty Falls 90 Points After RBI Policy Outcomes; Rupee Strengthens

Markets ended in the red after RBI's hawkish remarks on Thursday as it raised the inflation target owing to vegetable prices. However, RBI has maintained the status quo, keeping the repo rate at 6.50%. Sensex settled at 65,688.18, down by 307.63 points or 0.47%, while Nifty 50 finished at 19,543.10, lower by 89.45 points or 0.46%. Banking stocks were the worst hit. Meanwhile, the Indian rupee appreciated against the US dollar in the final minutes of the trading session as the greenback weakened.

Rupe closed at 82.7125 against the US dollar, gaining 0.12% from the previous day's print.

Talking about market performance, Vinod Nair, Head of Research at Geojit Financial Services said, "Inflation concerns have resurfaced in the domestic market after the RBI elevated their CPI forecast by 30 basis points to 5.4%, thereby increasing the chances of a protracted rate cut trajectory. Furthermore, the RBI's move to control liquidity through incremental CRR dented the sentiments of the banking sector, although the impact is projected to be limited."

Of the total 3,741 stocks listed on BSE, 1,680 stocks advanced, while 1,917 stocks declined and 144 stocks were unchanged. A total of 248 stocks hit fresh 52-week highs, and 28 stocks struck their new 52-week lows. 11 stocks touched upper circuit, and 8 stocks hit lower circuits.

By the end of trading hours of August 10, BSE-listed firms' market cap was nearly Rs 305.50 lakh crore.

Broad-based selling was recorded across sectoral indices. However, midcap and smallcap stocks recorded a marginal drop by 28.09 points or 51.63 points on BSE.

Bank Nifty shed 338.90 points or 0.76% to end at 44,541.80, while BSE Bankex dipped by 407.12 points to finish at 49,973.30 --- becoming the top underperformers of the day.

As per Ajit Mishra, SVP - Technical Research, Religare Broking, Markets remained volatile on the weekly expiry day and lost nearly half a per cent. After the initial downtick, Nifty oscillated in a range i.e. 19495-19625 and finally settled around the 19543.10 levels. The majority of sectors traded in tandem wherein FMCG, pharma and banking were the top losers. The broader indices too witnessed profit-taking and ended in the red.

Zee Entertainment shares were the stock of the day by skyrocketing nearly 18%, while Valiant Organics share price took a massive hit by tumbling over 10.1%.

On Sensex, Asian Paint, Kotak Bank, ITC, Axis Bank, Bharti Airtel, and Nestle were top losers. While stocks like IndusInd Bank, JSW Steel, Titan, Power Grid, and M&M were top gainers.

RBI kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50%. Further, the standing deposit facility (SDF) rate remains unchanged at 6.25% and the marginal standing facility (MSF) rate and the Bank Rate at 6.75%. Also, the MPC members decided to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth.

Nair added, "Against this backdrop, investors will be closely watching the US inflation print today and the domestic inflation data on Monday."

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