Sensex Drops 447 Points, Nifty Slips Below 22,650 Ahead of RBI Policy

Indian equity markets opened sharply lower on Wednesday as investors turned cautious ahead of the Reserve Bank of India’s monetary policy decision, with losses led by consumer, auto and banking stocks.

At 9:17 am, the BSE Sensex was down 446.56 points, or 0.61%, at 72,621.25, while the Nifty 50 declined 156.20 points, or 0.69%, to 22,619.90.

The broader market also started in negative territory, though the losses were smaller than those seen in the benchmark indices. The Nifty Midcap Select fell 0.57%, while the Nifty Midcap 100 slipped 0.58%. The Nifty Smallcap 100 declined 0.32%.

Investor caution was also reflected in the India VIX, which climbed 3.63% to 14.10, signalling higher expected volatility around the RBI policy outcome.

Consumer Durables, Auto Stocks Lead Decline

Most sectoral indices were trading lower in early deals. Nifty Consumer Durables emerged as the biggest drag, falling 1.49%, while Nifty Auto declined 1.12%.

Nifty PSU Bank fell 0.96%, Nifty Metal dropped 0.95% and Nifty FMCG declined 0.86%. Realty and Oil & Gas stocks were also under pressure, with their indices down 0.84% and 0.80%, respectively.

Financial stocks remained weak, with Nifty Financial Services and Nifty Bank each losing around 0.70%.

Some sectors bucked the broader trend. Nifty Media rose 0.32%, while Nifty Pharma gained 0.18%. The Nifty Healthcare index edged up 0.07%. Nifty IT was relatively resilient, declining 0.32%.

Titan, Asian Paints Among Major Losers

Among Sensex stocks, Titan was the biggest loser, falling 3.21% in early trading. Asian Paints declined 1.40%, while Bajaj Finance and Maruti Suzuki slipped 1.30% and 1.29%, respectively. IndiGo fell 1.25%.

Reliance Industries was down 1.11%, while Tata Steel, BEL and Axis Bank also traded in the red.

Bharti Airtel was among the notable gainers, rising 0.68%, while Sun Pharma edged up 0.12%. Tech Mahindra remained largely unchanged.

RBI Policy, Crude Prices and FPI Flows in Focus

V K Vijayakumar, chief investment strategist at Geojit Investments, said the recent 558-point recovery in the Nifty from last Thursday’s low had provided some relief to investors, but the broader market continued to face several headwinds.

He pointed to Brent crude trading above $101 a barrel and continued foreign portfolio investor outflows as key concerns, while domestic liquidity and expectations of strong second-quarter earnings were providing support.

According to Vijayakumar, the market’s immediate focus would be on the RBI’s monetary stance and the guidance from Governor Sanjay Malhotra.

He said a 25-basis-point rate hike was already largely factored into market expectations, making the RBI’s stance and assessment of the growth-inflation outlook more important for investors.

Vijayakumar also highlighted the narrowing interest-rate differential between India and the US, along with rising US Treasury yields and a stronger dollar, as factors adding pressure on the rupee.

He said currency stability would therefore remain an important consideration for the RBI even as the central bank balances growth and inflation concerns.