Equity benchmarks remained in the red through mid-afternoon trade on Wednesday after the Reserve Bank of India’s Monetary Policy Committee unanimously hiked the repo rate by 25 basis points to 5.50 per cent and shifted its policy stance from neutral to “calibrated tightening,” signalling that rate cuts are off the table in the near term.
At 1.44 pm, the BSE Sensex was trading at 72,644.84, down 422.97 points or 0.58 per cent, while the NSE Nifty 50 stood at 22,597.20, lower by 178.90 points or 0.79 per cent. The RBI also revised its FY2027 inflation forecast upward to 5.2 per cent from 5.0 per cent and its GDP growth estimate to 7.1 per cent from 6.7 per cent.
Banking stocks provided the day’s relative bright spot. Kotak Mahindra Bank was the top Nifty gainer, rising 1.98 per cent to ₹440.45, followed by BSE Ltd at ₹3,366.10, up 1.85 per cent.
Bharti Airtel added 1.84 per cent to ₹1,843.90, while Bajaj Finance gained 0.67 per cent to ₹969.60 and ICICI Bank edged up 0.60 per cent to ₹1,350.80.
According to SBI Securities, Bharti Airtel, Kotak Mahindra Bank, and ICICI Bank were the top three positive contributors to the Nifty. Nifty Media was the best-performing sectoral index, while Nifty Auto was the worst.
Selling pressure was concentrated in consumer discretionary, metals and financial services. Titan Company remained the heaviest loser, down 3.75 per cent to ₹4,379.30.
Shriram Finance and Adani Enterprises fell 3.08 per cent each, to ₹935.35 and ₹2,762.00 respectively. Hindalco Industries declined 2.46 per cent to ₹917.40, while JSW Steel lost 2.41 per cent to ₹1,229.30.
Market breadth on the BSE tilted negative, with 2,377 stocks declining against 1,834 advancing out of 4,470 traded. A total of 152 stocks hit 52-week highs, while 140 touched 52-week lows. Stocks in the upper circuit stood at 207 against 190 in the lower circuit.
“The change in stance to calibrated tightening felt more like a forward guidance than a policy stance per se, but has prepared markets for a higher-for-longer interest rate environment,” said Madhavi Arora, Chief Economist at Emkay Global Financial Services.
The 10-year government securities yield hardened 5–6 basis points after the announcement and was trading around 7.25 per cent. Deepak Agrawal, CIO–Debt at Kotak Mahindra AMC, said he expects a further 25 basis-point hike at the December policy review, subject to the evolution of underlying inflation and second-round effects.
Dnyanada Vaidya, Research Analyst at Axis Direct, also flagged that near-term margins for banks will remain under pressure due to excess liquidity and lower-spread lending, though the outlook for net interest margins turns constructive in the second half as rate hikes reflect in EBLR-linked portfolios.
Crude oil remained elevated, with WTI crude holding above $90 a barrel and Brent above $100, while COMEX gold slipped 0.51 per cent to $4,165.90, weighed by elevated Treasury yields. MCX crude edged up 0.89 per cent to ₹8,705. The Indian rupee was largely steady at ₹96.36 against the dollar.
“The real message from today’s MPC is not the 25 bps hike, but the RBI’s willingness to change its reaction function,” said Rishabh Nahar, Partner and Fund Manager at Qode Advisors, adding that the easy valuation tailwind from lower rates was beginning to fade and earnings would increasingly need to justify valuations.
SBI Securities placed Nifty support at 22,530–22,550 and resistance at 22,840–22,860, with an extension toward 23,010 possible on a decisive breakout above 22,860.