Sensex Today: Indian shares reversed course to trade lower on Wednesday after the country’s central bank hiked the key interest rate as expected, while signalling continued efforts to bring inflation down. Governor Shaktikanta Das said that the monetary policy committee (MPC) had retained its inflation forecast for the current financial year at 6.7 per cent. It, however, has made mild upward revisions to the inflation forecasts for the current quarter and the next quarter.
“The medium-term inflation target is exposed to heightened uncertainties…further calibrated monetary policy action is warranted to keep inflation expectations anchored, break the core inflation persistence and contain second-round effects,” Das said.
This, coupled with global weakness, pushed the benchmark S&P BSE Sensex index 216 points, or 0.34 per cent, lower at 62,411. The Nifty50, too, ended below the 18,600-mark at 18,560.5, down 82 points or 0.44 per cent.
In the broader market, the BSE MidCap and SmallCap indices fell in tandem with the frontline indices and slipped about 0.4 per cent each.
Sectorally, the Nifty FMCG index settled 0.96 per cent higher, after hitting fresh record high in the intra-day trade, after the Reserve Bank of India governor Shaktikanta Das said that going into October-December quarter of financial year 2022-23 (Q3FY23), economic activity seems to have gained strength in October.
That apart, the Nifty PSU Bank index, too, ended higher after the RBI extended the dispensation of an enhanced limit of the held-to-maturity (HTM) portfolio for government bonds till March 31 next year, enabling banks to better manage their investment portfolios.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “The near-term cues have turned negative once again with weakness in the mother market, the US. Talks of a longer-than-expected recession have again surfaced and negative comments from influential voices like that of Jamie Dimon are impacting sentiments. In such a scenario there are no positive triggers that can take the market much higher from here. Since India’s growth resilience looks impressive the market is unlikely to dip sharply. Buying will emerge on declines. Leading PSB banks have the potential to move up further and valuations are still attractive. Investors can buy high-quality stocks in capital goods and cement at current levels.”
Global Cues
Asia’s stock markets wobbled lower on Wednesday as reality bit on hopes for a soft economic landing in the United States, and investors curbed their enthusiasm about China’s reopening.
Tokyo stocks opened lower on Wednesday, tracking falls on Wall Street, where expressions of worry about a possible recession by leading bank executives added to investor unease. The benchmark Nikkei 225 index was down 0.57 per cent, or 159.73 points, at 27,726.14 in early trade, while the broader Topix index declined 0.44 per cent, or 8.64 points, to 1,941.58.
Wall Street ended lower on Tuesday, with the S&P 500 extending its losing streak to four sessions, as skittish investors fretted over Federal Reserve rate hikes and further talk of a looming recession.
Oil prices were mixed in early Asian trade on Wednesday after falling to their lowest settlement levels this year as economic uncertainty and the prospect of higher interest rates pressured prices.
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