The BSE Sensex fell for the fourth session in a row on Wednesday as investors see the Reserve Bank taking some more time before easing aggressive stance to rein in inflation.
The Sensex opened flat and traded considerably higher ahead of the RBI policy meet outcome as participants factored in likely 35 bps rate hike as several polls suggested. But RBI’s inflation outlook dragged the Sensex lower in late morning deals.
The 30-share Sensex finally closed the session 216 points or 0.34 percent lower at 62,411 – marking its fourth straight session of loss. The broader NSE Nifty closed 82 points or 0.44 percent down at 18,561 – the second straight session loss for the gauge.
“As the economy deals with the global headwinds, the RBI has become more realistic, lowering FY23 GDP growth forecast from 7 percent to 6.8 percent. The focus remains on fighting inflation which will lead to increase in interest rates in future. Along with a global slowdown corporate earnings forecast for H2FY23 & FY24 can downgrade. The market is currently trading at premium valuations, a slowing earnings growth will impact market sentiment,” said Vinod Nair, Head of Research at Geojit Financial.
The RBI hiked its repo rate by 35 basis points (bps) to 6.25 percent while signaling that efforts will continue to bring down the inflation.
Globally, stock markets fell and bonds remained supported after a chorus of Wall Street bankers warned about a likely recession ahead, tempering optimism about China’s major shift in its tough zero-COVID policy.
Top executives at Goldman Sachs, J.P. Morgan and Bank of America all sounded downbeat in remarks on Tuesday about the economic outlook, hurting risk appetite globally and triggering fresh recession signal from bond markets.
A weak start across European equity markets set the pan-regional STOXX 600 index for its fourth straight session of losses, down 0.1 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.5 percent.
