Sensex, Nifty Fall In A Volatile Session After RBI Keeps Rates Unchanged: Midday Market Update

India's benchmark stock indices slid through midday after inching closer to record highs on Thursday as all sectors declined with the exception of metals and non-banking financial companies after the Reserve Bank of India kept policy rates unchanged. 

The RBI's monetary policy committee voted unanimously to keep the policy repo rate unchanged at 6.5%. The MPC decided by a majority of 5:1 to remain focused on withdrawal of accommodation. India’s inflation is likely to remain above 4% in FY24, said RBI Governor Shaktikanta Das. However, the yield on the 10-year benchmark bond rose slightly even after the central bank kept rates unchanged. The governor mentioned the hikes in Australia and Canada — a possible hint at future increases amid the uncertain inflation outlook. Yields also advanced in Indonesia, the Philippines and Malaysia.

The moves in Japan were heavily influenced by GDP data that was much stronger than estimated. Benchmarks in Australia, South Korea and Japan declined. European and U.S. futures edged lower after a decline on Wall Street on Wednesday.

As of 12:34 p.m., the S&P BSE Sensex fell 70 points, or 0.11%, to 63,072.69, while the NSE Nifty 50 declined 34 points, or 0.18%, to 18,692.05.

HDFC Bank Ltd., HDFC Ltd., ICICI Bank Ltd., Larsen and Toubro Ltd., and Reliance Industries Ltd. were positively adding to changes in the Nifty 50.

Whereas, Axis Bank Ltd., Hindustan Unilever Ltd., Kotak Mahindra Bank Ltd., Mahindra & Mahindra Ltd. and Tata Consultancy Services Ltd. were weighing the index down.

The broader market indices underperformed the larger peers; the S&P BSE MidCap was down 0.56%, whereas S&P BSE SmallCap was lower by 0.31%.

Thirteen out of the 20 sectors compiled by BSE declined, while seven sectors advanced, with S&P BSE Utilities gaining the most.

The market breadth was skewed in the favour of buyers. About 1,447 stocks rose, 1,985 declined, and 125 remained unchanged on the BSE.