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May 04, 2022 / 04:53 PM IST

Closing Bell: Sensex tanks 1,307 pts, Nifty below 16,700 as RBI stuns with a rate hike

All the sectoral indices ended in the red with auto, bank, FMCG, power, metal, realty, healthcare, capital goods indices down 1-3 percent. BSE midcap index shed 2.63 percent and the smallcap index fell 2.11 percent.

  • IndexPricesChangeChange%
    Sensex53,035.62-125.66 -0.24%
    Nifty 5015,801.00-31.05 -0.20%
    Nifty Bank33,312.80-498.45 -1.47%
    Nifty 50 15,801.00 -31.05 (-0.20%)
    Wed, Jun 29, 2022
    Biggest GainerPricesChangeChange%
    Reliance2,562.8070.15 +2.81%
    Biggest LoserPricesChangeChange%
    HDFC Life544.55-13.45 -2.41%
    Best SectorPricesChangeChange%
    Nifty Energy24748.00270.05 +1.10%
    Worst SectorPricesChangeChange%
    Nifty PSU Bank2456.35-27.15 -1.09%


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  • May 04, 2022 / 04:36 PM IST

    Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

    Ahead of the Fed meeting in the US, the Reserve Bank has created a stir in the Indian markets by suddenly increasing interest rates. The prime rate has been increased by 40 basis points and the CRR has also been increased by 50 basis points. Behind this, we saw a sudden drop in the benchmark indices. 

    Finally, the market closed below the crucial level of 16800 on the back of a negative result, which would push the market further down to 16400/16200 in the near term. On the upside, 16800/16900 would act as the biggest hurdle. Reducing weak long positions is advisable near the 16800 levels and contra buying is recommended only around 16200 and below.

  • May 04, 2022 / 04:14 PM IST

    Vinod Nair, Head of Research at Geojit Financial Services:

    Although the rate hike was anticipated, the sudden announcement of a 40bps increase in repo rate along with a 50bps increase in CRR in response to the rising inflation spooked markets leading to a heavy selloff. 

    Global markets are also trading cautiously ahead of the upcoming Fed meeting, as an increase of more than 50 bps will extend the current consolidation phase.

  • May 04, 2022 / 04:04 PM IST

    Mohit Nigam, Head - PMS, Hem Securities:

    Benchmark Indices tumbles ~ 2% after surprise rate hike by RBI. Nifty 50 ended -2.29% and Sensex ended -2.29% today. The RBI monetary policy committee increased the key lending rate by 40 basis points, citing persistent inflationary pressures in the economy. 

    Investors should be cautious in these markets and can use these dips to make fresh positions in fundamentally sound stocks. 

    Immediate support and resistance for Nifty are 16,500 and 17,000 respectively.

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  • May 04, 2022 / 04:01 PM IST

    Vishal Amarnani, Head of Fixed Income, Emkay Wealth Management:

    As mentioned earlier, we are closing watching the 7.35 level on the 10-year benchmark. The level was taken today due to a surprise hike in the Repo rates by the RBI. The next technical level to watch out for is 7.60 if the closing is above the 7.35% level.

    By hiking the CRR, RBI is forcing the banking system to hold additional liquidity in reserves rather than lending it at lower rates to businesses. Around Rs 80,000 cr will be not available wef May 21, 2022, for lending from the banking system. 

    The current liquidity in the system is approximately Rs 7 lakh crores and the cost of funds is likely to go up. We see all the incremental lending across the tenor going up post today's move by the RBI.

  • May 04, 2022 / 03:58 PM IST

    Gulam Zia, Senior Executive Director- Knight Frank India:

    With the rapidly changing geopolitical scenario that continues to pressurize the global supply chain and commodity prices, domestic policy rates were expected to be realigned to the changing scenario. Therefore, while not unexpected, as the RBI Governor had already shared concerns over rising inflation, the interest rate hike amidst rising input costs is expected to have its impact on real estate. 

    The sector has vastly benefited by the low interest rates in the last two years. This policy rate hike will translate into higher EMIs for home loans. However, we believe that improved homebuyer attitude, preference for owning a house and strong wage growth will continue to support the housing market. The monetary policy stance is still accommodative and with the receding pandemic and economic growth, we expect that consumer demand will remain buoyant in the near term.

  • May 04, 2022 / 03:45 PM IST

    Rupee Close:

    Indian rupee ended 23 paise higher at 76.42 per dollar against previous close of 76.65 per dollar.

  • May 04, 2022 / 03:43 PM IST

    Nish Bhatt, Founder & CEO, Millwood Kane International:

    In a surprise move the central bank hiked rates to keep the runaway inflation in check. It was deja vu of sorts as the RBI announced policy action that was out of their regular meeting calendar, as they did in May 2020.

    The hike in the repo rate is aimed at easing the high pressure of inflation. Whereas the hike in CRR is to unwind the easy monetary policy and drain the excess liquidity out of the system. 

    The Governor's observation of food inflation is a cause of concern. RBI's assurance that the next steps will be calibrated and keeping in mind the economic recovery provides a positive line of direction along with the policy stance that is kept unchanged at Accommodative.

  • May 04, 2022 / 03:35 PM IST

    Market Close: Benchmark indices lost over 2 percent on May 4 after Reserve Bank of India (RBI) hikes the rates.   At Close, the Sensex was down 1,306.96 points or 2.29% at 55,669.03, and the Nifty was down 391.50 points or 2.29% at 16,677.60. About 825 shares have advanced, 2454 shares declined, and 98 shares are unchanged.   Apollo Hospitals, Adani Ports, Hindalco Industries, Bajaj Finance and Bajaj Finserv were among the top Nifty losers, while gainers were ONGC, Britannia Industries, Power Grid Corporation, NTPC and Kotak Mahindra Bank.   All the sectoral indices ended in the red with auto, bank, FMCG, power, metal, realty, healthcare, capital goods indices down 1-3 percent.   BSE midcap index shed 2.63 percent and the smallcap index fell 2.11 percent.

  • ADVERTISEMENT
  • May 04, 2022 / 03:28 PM IST

    Yash Gupta- Equity Research Analyst, Angel One:

    India's biggest IPO opens today with an IPO size of Rs 20,557 crores. The IPO will remain open for subscription from 4th May to 9th May 2022. Retail shareholders get a discount of Rs 45 per share and policyholders get a discount of Rs 60 per share.

    Policyholders who have linked their pan number with the LIC policy will be eligible for the policyholder discount. If an investor has more than one LIC policy, they also can apply for one application in the policyholder category. 

    A retail investor who is also a policyholder can apply for two IPO applications, one in the policyholder category and another one in the retail category, so that retail investors will be eligible for policyholder discount and retail investor discount.

  • May 04, 2022 / 03:27 PM IST

    Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services:

    In his surprise announcement, the RBI governor raised policy repo rate by 40 bps with immediate effect and also announced to hike CRR by 50bps. CRR hike would be effective from 21st May and would withdraw Rs 87,000 crore from the system. 

    The governor said that interest rate hike aimed at strengthening, consolidating medium-term economic growth prospects. 

    Overall commentary of the RBI governor was hawkish and that restricted losses for the rupee. But ahead of the important Fed policy statement we suggest that one must be cautious. Volatility for the USDINR will continue to remain elevated and we expect it to quote in the range of 76.05 and 76.80.

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