Equity benchmark indices ended lower , snapping a two-session winning streak after the Reserve Bank of India (RBI) raised the repo rate by 25 basis points to 5.5 per cent and shifted its monetary policy stance to “calibrated tightening”, dampening investor sentiment.
Commenting on Nifty technical outlook, experts said that the Nifty fell below 22,700 and closed near the important 22,600 support. “A sustained break below this level could reopen downside toward 22,400, while 22,800 is now the first recovery hurdle,” market watchers stated.
Investors remained cautious following the central bank’s move, which signalled a tighter interest rate environment going forward.
Among the Nifty constituents, Titan Company, BEL and Hindalco Industries emerged as the top laggards, weighing on the benchmark indices. Selling pressure was particularly visible in metal stocks, dragging the broader market lower.
In the broader market segment, the Nifty MidCap 100 index slipped 0.63 per cent, reflecting weakness in mid-sized stocks. However, the Nifty SmallCap 100 index bucked the trend and gained 0.30 per cent.
Sectorally, the Nifty Metal index was the worst performer of the day as investors pared exposure to metal counters. In contrast, the Nifty PSU Bank index outperformed other sectoral gauges and ended with gains, providing some support to the market.
Experts said that market participants are likely to closely monitor the impact of the RBI’s policy measures on economic growth, liquidity conditions and corporate earnings in the coming months as the central bank focuses on containing inflationary pressures.
“Looking ahead, the market focus will turn to the September-quarter earnings season for further direction. A resilient macroeconomic backdrop supports headline expectations, but investors will watch management commentary closely for evidence on whether the companies can absorb rising input costs, retain pricing power and sustain demand through the second half of the fiscal year,” analysts stated.
