The Sensex and the Nifty50 opened lower on Tuesday amid weakness across sectors. Investors awaited the outcome of a key RBI policy meeting due on June 8.
Indian equity benchmarks made a gap-down opening on Tuesday amid weakness across sectors ahead of the outcome of a key RBI meeting. Dalal street traced a mixed trend in global markets owning to persistent concerns about inflation and aggressive hikes in COVID-era interest rates.
The Sensex fell as much as 559.5 points to 55,115.9 and the Nifty50 slid to as low as 16,408.5, down 161.1 points from its previous close — with financial, IT and FMCG shares being the biggest drags.
Titan, Dr Reddy's, Hindustan Unilever, Asian Paints, Sun Pharma, Nestle, TCS, Tech Mahindra, UltraTech and Kotak Mahindra Bank were the major laggards in the Sensex pack.
On the other hand, NTPC and Reliance Industries were the only stocks in the green in the 30-scrip basket.
Broader markets mirrored the trend in headline indices, with the Nifty Midcap 100 and Nifty Smallcap 100 indices falling almost one percent each in early deals.
Investors have been preparing for a hike in the repo rate by the RBI — the key rate at which it lends money to commercial banks — after the central bank announced a surprise 40-basis point raise on May 4 in a bid to tackle worsening inflation.
According to a Reuters poll, the RBI is likely to concentrate interest rate hikes over the coming months in a relatively short tightening cycle, to reach its terminal level early next year.
"The weight of RBI's policy considerations has shifted away from economic support and towards taming inflation, suggesting that we should see a relatively fast pace of rate hikes ahead," Reuters quoted DBS Bank strategists Eugene Leow and Duncan Tan as saying.
"With inflation proving to be quite sticky, the risks around RBI's hike path are likely tilted to the upside," they added.
Crude oil prices inched higher on expected demand recovery in China as it relaxed tough COVID curbs. Brent crude futures were up by 19 cents or 0.2 percent at $119.7 barrel at the last count.
On Monday, Wall Street's main indices ticked higher at the close after a choppy session led by growth stocks. The S&P 500 rose 0.3 percent, the Nasdaq 0.4 percent and the Dow Jones 0.1 percent.