Mumbai : Sensex and Nifty indices closed nominally lower on Thursday, but at intra-day highs, on profit-taking by investors in banking, financial and energy stocks. The cautious stance seen on Thursday, ahead of the RBI’s policy decision, saw the indices take some rest after a six-day streak.
The Reserve Bank of India’s rate-setting committee (MPC) is set to announce its bi-monthly monetary policy on Friday to curb high inflation. While this is expected to be a growth of at least 35 basis points, analysts are also pointing to a higher growth rate. Moreover, the resumption of depreciation of rupee was also observed to affect investor sentiment and markets. In total petty trading. The ‘Sensex’ closed down 51.73 points at 58,298.80 and the Nifty index ended the day down 6.15 points at 17,382.
While the major indices softened, the broader market was positive. The BSE Midcap, representing mid- and lower-end stocks, gained 0.29 percent and the Smallcap index gained 0.25 percent.
Ahead of the RBI’s decision, a sell-off in interest rate-sensitive sectors such as banking and real estate curbed the index’s rally.
Attention to rate of inflation
The market will be closely watching the rate of hike in the repo rate from the Reserve Bank of India meeting on Friday. A hike of 35 to 50 basis points has been assumed by the market, but any hike beyond that would be a source of disapproval. Before that, the reaction of global markets to the latest developments on Sino-Taiwan tensions will determine the direction of local markets.