Closing Bell: Nifty, Sensex Sell-Off To Third Day; RBI Policy In Focus

Extending its sell-off to the third straight session, equity benchmark Sensex slumped 568 points on Tuesday as investors scrambled to offload riskier assets ahead of the RBI's policy decision.

Wobbly global markets, continuous foreign fund outflows and the rupee crashing to a record low against the US dollar further queered the pitch for Dalal Street.

The 30-share BSE Sensex opened in the red and sank around 800 points during the session. It finally finished 567.98 points or 1.02 per cent lower at 55,107.34.

The broader NSE Nifty slumped 153.20 points or 0.92 per cent to end at 16,416.35.

Titan was the biggest laggard in the Sensex pack, tumbling 4.48 per cent, followed by Dr Reddy's, Larsen & Toubro, HUL, Asian Paints, Bajaj Finance, TCS and Nestle India.

Only five counters managed to close higher -- NTPC, Maruti, M&M, Bharti Airtel and Reliance Industries, climbing up to 1.35 per cent.

The RBI will announce its monetary policy decision on Wednesday amid expectations of another hike in benchmark interest rate to contain inflation that continues to remain above the central bank's upper tolerance level.

"The volatility in the market is forcing investors to stay sidelined ahead of the RBI's policy announcement. The market has factored a hike of up to 50 bps of repo rate and CRR, but any further stricter measures to clamp liquidity due to lingering inflation will have ramifications on the market trend.

"Apart from the monetary measures, the RBI's guidance on growth and inflation forecast will determine the market trend," said Vinod Nair, Head of Research at Geojit Financial Services.

Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, said, "The Nifty bears took control once again leading to a fall in the index towards the crucial support zone 16,400-16,350. Volatility is likely to continue ahead of the RBI policy and a clear-cut direction will be visible post the outcome."

In the broader market, the BSE midcap gauge declined 0.77 per cent and the smallcap index shed 0.67 per cent.
Among BSE sectoral indices, consumer durables slumped 2.71 per cent, followed by realty (1.57 per cent), capital goods (1.53 per cent), FMCG (1.42 per cent), IT (1.42 per cent), teck (1.32 per cent) and basic materials (1.17 per cent). In contrast, oil & gas, energy, telecom, utilities, auto and power mustered gains.

A total of 2,011 stocks declined, while 1,286 advanced and 121 remained unchanged. World markets ticked lower after Australia's central bank hiked rates by 50 basis points -- a likely precursor to similar action by the European Central Bank, US Federal Reserve and others amid scorching inflation.

Elsewhere in Asia, markets in Hong Kong and Seoul finished in the negative zone, while Tokyo and Shanghai ended with marginal gains.

European markets were trading lower during afternoon trade. Wall Street had ended higher on Monday. Meanwhile, international oil benchmark Brent crude dipped 0.26 per cent to USD 119.2 per barrel.

The rupee slipped 7 paise to close at an all-time low of 77.73 against the US dollar on Tuesday.

Continuing their selling spree, foreign institutional investors offloaded shares worth a net Rs 2,397.65 crore on Monday, according to stock exchange data.