The Reserve Bank since May has increased the repo or benchmark lending rates by 190 basis points, to calm down inflation which has remained above its comfort level of 6 per cent since January
The Indian equity benchmarks fell for second straight session ahead of the Reserve Bank of India's monetary policy decision due tomorrow. The Sensex fell as much as 445 points and Nifty 50 index briefly dropped below its important psychological level of 18,600.
The Sensex ended 208 points lower at 62,626 and Nifty 50 index declined 58 points to close at 18,643.
After three back-to-back 50 basis points hike in interest rates, the Reserve Bank may opt for a lower rate increase of 25-35 bps in lending rates at its coming monetary policy review on Wednesday amid retail inflation showing signs of moderation and the need to push growth, according to experts.
The Reserve Bank of India (RBI) will come out with its next bi-monthly policy review on December 7 at the end of the three-day meeting of the Monetary Policy Committee (MPC) beginning Monday.
The Reserve Bank since May has increased the repo or benchmark lending rates by 190 basis points, to calm down inflation which has remained above its comfort level of 6 per cent since January.
Selling pressure was broad-based as nine of 11 sector gauges compiled by the National Stock Exchange ended lower led by the Nifty IT index's 1.45 per cent decline. Pharma, metal, realty, private bank, media and bank shares also faced selling pressure.
On the other hand, state-run banking and FMCG shares witnessed buying interest.
Mid- and small-cap shares also faced selling pressure as Nifty Midcap 100 index fell 0.5 per cent and Nifty Smallcap 100 index declined 0.2 per cent.
Bharat Petroleum was top Nifty loser, the stock fell 3 per cent to Rs 328. Hindalco, Tata Steel, Dr Reddy's Labs, UPL, Infosys, Indusind Bank, Eicher Motors, State Bank of India, JSW Steel, TCS, ICICI Bank and Bharti Airtel also fell between 1-2.6 per cent.
On the flipside, Adani Enterprises, Hindustan Unilever, Nestle India, Bajaj Auto, Ultratech Cement, Axis Bank, Power Grid and Grasim Industries were among the gainers.
The overall market breadth was negative as 1,899 shares ended lower while 1,596 ended higher on the BSE.