Bears growl on RBI MPC policy day, Sensex slumps 581 points

Mumbai, Aug 8 : India's equity indices closed lower on Thursday following a hawkish stance by the Reserve Bank of India (RBI) governor in the monetary policy.

At closing, Sensex fell 581 points or 0.73 per cent to 78,886 and Nifty slipped 180 points or 0.74 per cent to 24,117.

The Central Bank kept the repo rate unchanged at 6.5 per cent with a growth rate outlook for the current financial year at 7.2 per cent.

On the Bombay Stock Exchange (BSE), 1,768 shares were in green mark, 2,137 shares in red mark and 105 shares closed without any change.

Midcap and smallcap indices also saw a decline. The Nifty Midcap 100 index fell 192 points or 0.34 per cent to 56,681 and the Nifty Smallcap 100 index fell 76 points or 0.41 per cent to 18,307.

Among the sectoral indices, IT, PSU Bank, FMCG, metal, realty, energy and infra were the major laggards. Fin Service, pharma, media and private bank were the major gainers.

In the Sensex pack, Tata Motors, HDFC Bank, Bharti Airtel, ITC, IndusInd Bank and Axis Bank were the top gainers. Asian Paints, Infosys, JSW Steel, UltraTech Cement, Power Grid, L&T and HCL Tech were top losers.

Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares and Stock Brokers, said that “The RBI in its 50th MPC meet decided to keep its stance on both policy rates and liquidity unchanged. A key point to note is his emphasis on food inflation. On a net basis we think the policy was nothing out of consensus and hence remains neutral for the markets."

According to market watchers, the recent trend in institutional activity indicates a clear trend. FIIs are in a risk-off mood and are playing it safe with sustained selling. During the last four days, FIIs have sold for Rs 20,228 crore in the cash market.