Sensex sinks 429 points, Nifty falls 173 as RBI hikes repo rate to 5.50%

The BSE Sensex fell 429.11 points to close at 72,638.70 on Wednesday and the Nifty 50 slipped 173.05 points to 22,603.05, snapping a two-day rebound after the Reserve Bank of India raised its benchmark repo rate by 25 basis points to 5.50% and shifted its stance to 'calibrated tightening'.

Twenty-six of the thirty Sensex constituents closed lower as rate-sensitive sectors bore the brunt of the selling. Titan Company led the losses with a near-4% slide, joined by Adani Enterprises, Hindalco, Bharat Electronics and Asian Paints; Kotak Mahindra Bank, Bharti Airtel and Bajaj Finance were the rare gainers.

The hike — the first since February 2023 — was framed as a response to sticky inflation aggravated by surging crude, with Brent jumping 1.41% to $102 a barrel. Foreign funds kept selling while domestic institutions absorbed the supply, and the rupee tumbled 43 paise to 96.78 against the dollar.

Attention now turns to whether 'calibrated tightening' means more hikes are on the way: bond desks will parse the governor's every word, and rate-sensitive stocks will likely stay under pressure until the path is clearer.