Sensex and Nifty Decline as Investors React to RBI MPC Outcomes
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Synopsis
On February 7, the Indian stock market ended lower as investors reviewed the RBI's MPC decision to cut the repo rate by 25 basis points. Despite this, the central bank maintained a neutral stance on policy.
Key Takeaways
- BSE Sensex dropped by 198 points, closing at 77,860.
- NSE Nifty declined by 43 points, ending at 23,560.
- ITC and Bharti Airtel were among the top gainers.
- Market volatility was influenced by the RBI's monetary policy announcement.
- Sector performances varied, with Nifty Metal index gaining over 2%.
Mumbai, Feb 7 (NationPress) The Indian stock market faced a downturn on Friday as investors assessed the Reserve Bank of India (RBI)'s Monetary Policy Committee decision to reduce the repo rate by 25 basis points (bps).
Despite this, the central bank retained a neutral policy stance.
The Monetary Policy Committee (MPC) opted to lower the repo rate from 6.5 per cent to 6.25 per cent.
RBI Governor Sanjay Malhotra highlighted that the committee's focus remains on controlling inflation while fostering economic growth.
Post-announcement, the BSE Sensex peaked at 78,357 but subsequently plummeted nearly 900 points, reaching a low of 77,476 during intra-day trading.
The index eventually closed at 77,860, down by 198 points. This marked the third consecutive day of losses for the Sensex, although it concluded the week 354 points higher.
The NSE Nifty index saw fluctuations between 23,694 and 23,443, ultimately closing at 23,560 with a decrease of 43 points.
According to Rupak De, Senior Technical Analyst at LKP Securities, "The Nifty displayed volatility following the RBI Governor's monetary policy announcement. However, this volatility did not push the index below the 21 EMA on the daily timeframe, indicating a positive short-term trend."
He added that the trend is expected to remain positive as long as the index remains above 23,450.
Among the top gainers on the Sensex, ITC surged 4.5 per cent, while Bharti Airtel rose 3.5 per cent after reporting a five-fold increase in its Q3 profit.
Other notable performers included Zomato, Mahindra & Mahindra, UltraTech Cement, IndusInd Bank, Tech Mahindra, and NTPC.
Conversely, ITC and SBI fell over 2 per cent each following their Q3 results announcement.
Other significant laggards included Reliance Industries, TCS, ICICI Bank, and Power Grid.
Sector-wise, the Nifty FMCG and PSU Bank indices dropped around 1.5 per cent, whereas the Oil & Gas index fell nearly 1 per cent.
In contrast, the Nifty Metal index rose over 2 per cent during the intra-day trading session.
In the broader market, the MidCap index managed slight gains, while the SmallCap index experienced minor losses.
Meanwhile, the India VIX, a measure of market volatility, decreased by 4 per cent.
Out of 4,057 stocks traded on the BSE, 2,433 closed lower, while 1,478 gained.
