Share Market update: Sensex falls 214 pts, Nifty below 16,400; Airtel, ITC, RIL top losers

The Indian market ended lower for the fourth straight session today after the RBI policy meet outcome. Sensex fell 214 points to 54,892 and Nifty closed 60 points lower at 16,356  in trade today.

Benchmark indices ended lower for the third straight day on Tuesday amid weak global markets and continuous foreign funds outflow. Sensex tanked 567.98 points to end at 55,107.34 and Nifty fell 153.20 points to close at 16,416.35.

Here's a look at live market updates today.

3:39 pm: Market ends lower

Sensex falls 214 points to 54,892 and Nifty ends 60 points lower at 16,356  in trade today.

 3:01 pm: Expert take on rate hike

Raghvendra Nath, Managing Director - Ladderup Wealth Management Private said, "RBI's change in view from an accommodative stance in Feb'22 to a hawkish statement couple of weeks back and sudden rate hike today has taken the market by surprise. Somewhere it makes us wonder whether RBI knows more than they are letting on in their statement. This surprise move by RBI has dampened the market mood and may impact the divestment target of the government."

2:46 pm: Sensex falls 338 points to 54,769 and Nifty loses 82 points to 16,334 in the afternoon session.

2:30 pm: Top losers

Airtel, ITC and RIL are the top Sensex losers, falling up to 2.84 per cent in the afternoon session.

1:34 pm: Market trading in the red

Sensex falls 150 points to 54,956 and Nifty loses 46 points to 16369 in the afternoon session.

12:30 pm:  Will 90 bps hike in repo rates in 2 MPC meetings help tame 95-month high inflation?

High inflation coupled with aggressive rate hike plans by the US Federal Reserve, strengthening of the US dollar and outflow by foreign institutional investors (FIIs) from emerging market economies, including India, has pushed the Reserve Bank of India (RBI) on Wednesday to hike the repo rate by 50 basis points (bps) to 4.90 per cent. In a surprise move, the central bank had upped the rate by 40 bps in May. Read  More

11:43 am: Experts quote on RBI MPC

Ravi Singh, vice President and head of Research, Share India

"In line with the expectation, RBI has increased the repo rate by 50 basis points and is already discounted by the market. The Ukraine Russia war has led to an increase in inflation globally beyond tolerance level and is effecting the economic growth. However, most of the industries are already facing headwinds due to steep increase in raw materials cost and fuel prices, and a hike in the rates will further increase the burden. The Fed is also increasing the rate so there is major possibility that apart from equity market, other markets like debt market and bond market may see some outflow anytime soon.

Auto, Real estate, Banking and infrastructure stocks would be worst hit by the rate hike as loan financing is a major part of these sectors. FMCG, Insurance, Energy, Power and Utility sectors provides a cushion against rising interest rates."

Atul Goel, MD, Goel Ganga Group

"RBI’s recent step to increase the repo rate by 50 basis points has been on the expected lines. To curb inflation, the regulatory bodies in India were required to control liquidity circulation in the economy. For a few months, the inflation rate has been above 6%, which is beyond the RBI’s safe zone. If not controlled, the inflationary pressure could destabilize an otherwise bullish Indian economy. Although the recent step will increase the home loan rates, an unstable economy is not conducive to the overall health of the real estate industry. For the industry to operate optimally, it is important that the economy continues to grow in a stable, inclusive, and steady fashion."

Manoj Dalmia, founder and director, Proficient Equities
 

"RBI has raised the repo rate by 40bps  to 4.9% , the inflation projection for this fiscal is 6.7% and will remain above the tolerance band of 2-6%  for three quarters in this fiscal, RBI is still expects the economy to grow at a rate of 7.2% .

The SDF and MSF have been increased to 4.65% and 5.15% respectively, RBI is expected to reduce liquidity, reinforcing its fight against inflation and extending its effort to return monetary conditions. The cost of lending for banks is set to go up due to an increase in repo rate ,retail loans will face direct impact due to this."

Suren Goyal, Partner, RPS Group
 

"We welcome the step of the apex body to increase the overall repo rates by another 50 basis points. This will help in clamping down inflation and smoothen economic growth. A rise in inflation can soften the stance on an otherwise robust real estate industry. Already raw material prices are increasing and an unbridled rate of inflation will further drive the input costs northwards, therefore resulting in cost overruns for the developer fraternity. In such a case they will have no option but to pass on the price to the homebuyers. Meanwhile, the government should also take concentrated efforts to reduce the spike in prices of raw materials such as cement, bricks, steel, etc. This will also give some relief to the sector."

Ravi Singhal, Vice Chairman, GCL Securities Limited

"Inflation target increased from 5.7 percent to 6.7 percent, exceeding the RBI's target of 4 percent; repo rate increased by.50 basis point; and CRR remains positive for banking. The inflation target is for fiscal year 23."

11:37 am: Paytm stock rises over 3% as JP Morgan sees 62% upside in a year

Shares of Paytm (listed as One97 Communications) rose over 3 per cent today as US financial services firm JP Morgan reinstated overweight rating despite a 71 per cent fall in the stock from its IPO price.  The brokerage has cut target price of Paytm to Rs 1,000 from Rs 1,200 earlier.  However , the fresh target price is still 62 per cent higher than the current market price.

Paytm stock touched an intraday high of Rs 639, rising 3.5 percent against the previous close of Rs 617.40 on BSE. The large cap stock trades higher than 20-day and 50-day moving averages but lower than 5-day, 100-day and 200-day moving averages.

However, the stock has lost 52.85 per cent in 2022 but rose 10.81 per cent in a month. Market cap of Paytm stood at Rs 40,848 crore on BSE.

11:16 am : Expert take on RBI policy

Asutosh Mishra, Head Of Research, Institutional Equity, Ashika Group said, "RBI continued to accelerate the pace of tightening with 50 bps hike v/s 40 bps hike in the last mid cycle policy announcement. Hike in the benchmark rate is at the upper end of the market estimates and clearly indicates that urgency at the RBI end to contain the inflation with little focus on the impact of same on the growth.

This is also being reflected in the RBI’s inflation and GDP projection as RBI increase the inflation projection for FY23 by 100bps to 6.7% v/s keeping the GDP growth projection at 7.2%."

10:54 am: Expert take on RBI policy

Suvodeep Rakshit, Senior Economist at Kotak Institutional Equities said, "The June policy was a continuation of the off-cycle policy with the focus remaining squarely on inflation. The RBI's decision of hiking repo rate by 50 bps as well as increasing inflation estimate by 100 bps were in line with market expectations. The tone of the policy continues to be hawkish and we expect the RBI to continue hiking repo rate to ensure a neutral to marginally positive real policy rate. We expect 35 bps repo rate hike in the August policy to 5.25% and repo rate at 5.75% by end-FY2023. Along with pushing the repo rate to above the pre-pandemic level, a 35 bps hike would also signal a gradual normalization in the policy actions while being adequately hawkish. We also expect another 50 bps hike in CRR to 5% by end-FY2023 to move the liquidity conditions towards the pre-pandemic levels."

10:42 am: Market turns positive

Sensex rises 190 points to 55,298 and Nifty gains 33 points to 16450.

10:32 am: Expert take on rate hike

Upasna Bhardwaj Chief Economist at Kotak Mahindra Bank said, "The 50bps repo rate hike comes on the back of persistence of elevated inflation and the continued upside risks. Given that inflation is expected to remain above 6% through 3QFY23 , RBI has to frontload actions. We continue to see another 60-85bps hike in rest of FY23 to manage inflationary expectations".

10:08 am: RBI raises repo rate by 50 bps

Sensex declines 354 points to 54,753 and Nifty falls 84 points to 16,332 after Das announces a 50 bps hike in repo rate to 4.9 percent.

10:04 am: Sensex falls 263 points to 54,843 and Nifty loses 73 points to 16,343 as RBI Governor Shaktikanta Das starts speaking on the monetary policy.

10:02 am: Yield on the 10-year bond opened at 7.52% ahead of RBI's rate decision.

9:57 am: Sensex falls 172 points to 54,934 and Nifty loses 41 points at 16374.

9:40 AM: Banking stocks trading higher ahead of RBI's policy meet outcome

Banking stocks were among the top gainers in early trade ahead of Reserve Bank of India's (RBI) three-day monetary policy  meet outcome today. BSE bankex gained 135 points to 40,511 and Bank Nifty was trading 87 points higher at 35,082. Shares of other rate sensitive sectors such as auto were trading lower in early trade. The BSE auto index fell 66 points to 25,861. READ MORE

9:20 am: Sensex fell 11 points to 55,095 and Nifty was trading flat at 16,416.

9:07 AM: Pre-opening market comments

Prashanth Tapse, Vice President (Research), Mehta Equities Ltd said, "Domestic equities are likely to see a gap up opening on the back of a strong upsurge in overnight US markets and early optimism in SGX Nifty. However, if the RBI's rate hike decision meets street expectations, markets may price in the hike. The street suspects RBI will go for another 40-basis points rate hike. That said, RBI would also prefer to go slow on rate hikes in the backdrop of the government too responding to the inflation risks. The recent announcement on fuel tax cuts and reduction of import duties on edible oils will provide some comfort to the RBI. Besides the Reserve Bank of India, the European Central Bank is also set to meet next week with the outcome expected on June 9."

8:35 am: Expert take

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said, "Technically, Nifty broke the important support level of 16,450 and closed below the same which is largely negative. In addition, the index has also formed a bearish candle indicating short-term weakness. For traders, as long as the index is trading below 16,500 the short-term texture remains weak, below which the correction wave is likely to continue till 16,300. Any further correction could drag the index up to 16,225. On the other hand, above 16,500, there are chances the index could hit 16,600-16,650."

8:30 am: SGX Nifty

The Indian market is likely to open higher today as SGX Nifty rose 64 points to 16,489. The Singapore Stock Exchange is considered to be the first indication of the opening of the Indian market.

8:15 am: Market on Tuesday

Benchmark indices ended lower for the third straight day on Tuesday amid weak global markets and continuous foreign funds outflow. Sensex tanked 567.98 points to end at 55,107.34 and Nifty fell 153.20 points to close at 16,416.35.