4 hrs ago
Sensex, Nifty Fall as Rate Hike, Crude and Selling Weigh
Indian shares went down on Thursday.
Many investors worried that borrowing could become more expensive after the Reserve Bank of India raised interest rates.
Oil prices were also high, which can make people worry about rising prices for goods.
Foreign investors had sold a large amount of Indian shares the day before.
Indian institutions bought shares, but that did not stop the overall market decline.
High US bond yields and a weaker rupee were other concerns mentioned in the reports.
The market moved during the day, so the articles give different index levels from different times.
In one morning report, technology shares rose even as most sectors fell.
Indian benchmark indices fell on Thursday, October 8, as investors weighed the Reserve Bank of India's rate hike, rising oil prices and foreign selling.
The RBI raised its repo rate by 25 basis points to 5.50% on Wednesday and shifted its policy stance to “calibrated tightening.”
Market reports captured different trading times: the Sensex ranged from 72,408.15 in early trade to 71,883 at 12:16 pm, while the Nifty ranged from 22,507.65 to 22,359.
Foreign institutional investors sold equities worth ₹6,121.37 crore on Wednesday; domestic institutions bought around ₹4,596 crore, according to one report.
Crude near $102 a barrel, elevated US Treasury yields and rupee weakness added to investor concerns, while IT shares rose in one morning snapshot.
- Who
- Indian stock-market investors, including foreign and domestic institutional investors, and the Reserve Bank of India.
- What
- The Sensex and Nifty fell as investors reacted to the RBI rate decision, crude prices and foreign selling.
- Where
- Indian equity markets.
- When
- Thursday, October 8; the RBI announced the rate increase on Wednesday.
- Why
- Reports cited tighter financial conditions, rising crude prices, foreign investor selling and elevated global bond yields as reasons for investor caution.
Factors weighing on markets
Sources of support or potential relief
Investor flows
Factors weighing on markets
Foreign institutional investors sold more than ₹6,121 crore of equities, contributing to market pressure.
Sources of support or potential relief
Domestic institutional investors bought around ₹4,596 crore, providing some support.
Market performance
Factors weighing on markets
Most major sectoral indices were lower in the 10:39 IST report, and the broader market also fell.
Sources of support or potential relief
The IT sector gained 1.8% in that snapshot, with TCS rising ahead of its earnings announcement.
Potential change in conditions
Factors weighing on markets
Analysts cited elevated crude prices and US bond yields as ongoing headwinds; one said selling pressure could persist while yields remain high.
Sources of support or potential relief
One analyst said the market backdrop could change if crude prices decline sharply, though the timing was unclear.
Key facts
- RBI repo rate
- Raised by 25 basis points to 5.50% on Wednesday.
- RBI policy stance
- Shifted from “neutral” to “calibrated tightening,” according to one report.
- Foreign institutional investors
- Sold equities worth ₹6,121.37 crore on Wednesday.
- Domestic institutional investors
- Bought around ₹4,596 crore on Wednesday, according to one report.
- Crude oil
- Brent was reported at about $102 a barrel.
- Later intraday snapshot
- At 12:16 pm, one report put the Nifty at 22,359 and the Sensex at 71,883.
- Sector performance
- At 10:39 IST, 14 of 16 major sectoral indices were lower; IT gained 1.8%.
Quotes
Hariselvan Radhakrishnan
Founder and CEO of HST Wealth, a research analyst firm
“The key overhang is no longer the RBI's rate increase alone, but the growing prospect of tighter domestic and global monetary conditions persisting for longer, potentially keeping pressure on risk appetite and foreign flows. The RBI's shift to calibrated tightening, followed by Federal Reserve minutes indicating another US rate increase may be required this year, could limit risk appetite.”
deccanchronicle.com
“The outlook for Indian equities remains cautious after the RBI raised its repo rate to 5.50 per cent, tightening domestic financial conditions at a time when global markets are already contending with elevated Treasury yields and geopolitical uncertainty. Tighter domestic financial conditions and a fragile global risk backdrop could keep investors defensive.”
deccanchronicle.com
Siddharth Maurya
Founder and managing director of Vibhavangal Anukulakara Pvt. Ltd.
“The recent rise in the repo rate by 25 basis points has made investors more apprehensive about liquidity and cost of borrowing. With the global markets also coming under pressure, investors have turned defensive. In the short run, volatility will stay high, and the course of the market will depend on quarterly results, crude prices, and the RBI.”
livemint.com
“The weakness seen today in the market is largely attributed to the hawkish stance of the RBI, increasing crude prices, and continued foreign selling. Increasing crude prices are fueling worries about inflation, and high bond yields and weakening rupee are other reasons why investors are remaining cautious.”
livemint.com
Sources
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