Key benchmark indices extended losses for the fourth straight session on Wednesday, as traders sold stocks post the Reserve Bank of India (RBI)'s repo rate hike. Selling was triggered after the RBI slashed its GDP forecast to 6.8% from an earlier estimate of 7% for the current fiscal. After hitting the day's high of 18,668.30 in morning trade, the Nifty reversed trend and hit the day's low of 18,528.40 in late trade. Media, realty and consumer durables shares tumbled. On the other hand, FMCG and PSU banks bucked the trend.

The barometer index, the S&P BSE Sensex, was down 215.68 points or 0.34% to 62,410.68. The Nifty 50 index lost 82.25 points or 0.44% to 18,560.50. Both the indices declined 1.3% in four straight days.

Reliance Industries (down 1.43%), Kotak Mahindra Bank (down 1.09%) and HDFC (down 0.88%) were major drags.

In the broader market, the S&P BSE Mid-Cap index shed 0.41% while the S&P BSE Small-Cap index declined 0.44%.

The market breadth was negative. On the BSE, 1,518 shares rose and 1,981 shares fell. A total of 142 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rose 0.24% to 14.08.

RBI Policy Outcome:

The six-member monetary policy committee (MPC) headed by RBI Governor on Wednesday (7 December) raised the key lending rate or the repo rate by 35 basis points to 6.25%. Consequently, the standing deposit facility (SDF) rate is adjusted to 6% and the marginal standing facility (MSF) rate and bank rate to 6.50%.

The MPC also decided to remain focused on the withdrawal of the accommodative stance to ensure that inflation remains within the target going forward while supporting growth.

On the inflation outlook, the governor said it is expected to be at 6.7% for the current fiscal. Concerning economic growth, the RBI has slashed its GDP forecast to 6.8% from an earlier estimate of 7% for the current fiscal.

The next meeting of the MPC is scheduled during 6-8 February 2023.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose to 7.272 as compared with 7.249 at close in the previous trading session.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 82.47, compared with its close of 82.5 during the previous trading session.

MCX Gold futures for 3 February 2023 settlement slipped 0.01% to Rs 53,757.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.06% to 105.52.

The United States 10-year bond yield rose 0.52% to 3.531.

In the commodities market, Brent crude for February 2023 settlement declined 86 cents, or 1.08% to $78.49 a barrel.

Global Markets:

Markets in Europe and Asia tumbled on Wednesday after major U.S. indexes fell more than 1% each overnight as recession concerns weigh on markets.

US stocks tumbled Tuesday, building on the previous session's losses, as fears of a recession gripped Wall Street.

Stocks in Spotlight:

Siemens jumped 5.02%. The company has emerged as the lowest bidder (L1) for the 9000 HP Electric Locomotives project in Dahod, Gujarat, India.

Bikaji Foods International advanced 4.21%. The company's consolidated net profit jumped 43.6% to Rs 40.93 crore on 31.8% rise in net sales to Rs 576.97 crore in Q2 FY23 over Q2 FY22.

Star Housing Finance gained 1.52%. The company announced that its board has approved 2-for-1 stock split and 1:1 issue of bonus shares.

Vedanta shed 0.43%. The mining company on Tuesday announced that its board will meet on Friday, 9 December 2022 to consider fund raising by issuing non-convertible debentures (NCDs) aggregating up to Rs 500 crore in one or more tranches.

Larsen & Toubro (L&T) rose 1.42%. The EPC major announced that its construction arm has secured 'mega' orders for its minerals and metals (M&M) business. As per L&T classification, the value of the mega project is above Rs 7,000 crore.

Ugro Capital rose 0.47%. A meeting of the Investment and borrowing committee of the board of directors is scheduled to be held on 9 December 2022, to consider and approve raising of funds by way of issuance of market-linked non-convertible debentures on private placement basis.

Ircon International fell 0.08%. The company has been awarded the work for procurement of design, installation, testing, commissioning and certifying of signalling and telecommunication system from Maho Junction (Including) to Anuradhapura (Excluding) by Sri Lanka Railways, Ministry of Transport, Sri Lanka, at a total price of $14.89 million equivalent to approximately Rs 122 crore.

Narmada Gelatines hit an upper circuit of 20% to Rs 350 after the company's board declared a special interim dividend of Rs 100 per equity share for the financial year 2022-23. The board fixed the record date as Thursday, 15 December 2022, for the purpose of interim dividend.

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