Indian equity benchmarks on Wednesday plunged sharply after Reserve Bank of India (RBI) announced a hike in key interest rate. In a surprise move, RBI raised the repo rate by 40 basis points (bps) to 4.40 per cent in an off-cycle meeting today. Repo rate is the rate at which a central bank lends money to banks.
RBI's rate hike decision is aimed to curb surging inflationary pressure. The Reserve Bank had maintained status quo on key policy rates for almost two years due to the ongoing Covid-19 pandemic.
The U.S. Federal Reserve is also expected to raise rates by 50 bps when its meeting concludes later in the day.
Back home, the 30-share BSE Sensex tanked 1,307 points or 2.29 per cent to close at 55,669, while the broader NSE Nifty moved 392 points or 2.29 per cent down to settle at 16,678.
Mid- and small-cap shares were weak as Nifty Midcap 100 fell 2.12 per cent and small-cap shed 2.35 per cent.
All of the 15 sector gauges -- compiled by the National Stock Exchange -- were trading in the red. Nifty Consumer Durables, Nifty Metal and Nifty Financial Services were underperforming the index by falling as much as 3.62 per cent, 3.21 per cent and 2.61 per cent, respectively.
On the stock-specific front, Apollo Hospitals was the top loser as the stock cracked 6.59 per cent to Rs 4,021. Adani Ports, Hindalco, Titan and Bajaj Finance were also among the losers.
The overall market breadth stood negative as 864 shares were advancing while 2,508 were declining on BSE.
On the 30-share BSE index, Bajaj Finserv, Bajaj Finance, Titan, IndusInd Bank, HDFC Bank, Reliance Industries, Asian Paints, Maruti, Dr Reddy's and Axis Bank were among the top laggards.
In contrast, PowerGrid, NTPC, and Kotak Mahindra Bank were trading in the green.
Meanwhile, state-insurer Life Insurance Corporation of India (LIC) opened for subscription today. As of 3:39 pm, the public issue was subscribed 0.54 times.