Sensex and Nifty Drop Amid Persistent Food Inflation and FII Outflows

Equity benchmarks Sensex and Nifty continued their decline as the RBI held the policy rate steady for the ninth consecutive time, citing persistent food inflation. Foreign fund outflows and weak U.S. market trends further pressured domestic equities. Major laggards included Power Grid and Infosys, while Tata Motors saw gains.

Equity benchmark indices Sensex and Nifty continued their downward trajectory on Thursday following the Reserve Bank of India's decision to maintain the policy rate at its current level for the ninth consecutive period, citing stubborn food inflation.

Declines were further exacerbated by consistent foreign fund outflows and weak trends in the U.S. markets, leading to a substantial drop in domestic equities. Extending its early trade decline, the 30-share BSE Sensex fell by 570.09 points to settle at 78,897.92, while the NSE Nifty dropped 178.2 points to close at 24,119.30.

After six consecutive rate hikes aggregating to 250 basis points since May 2022, the rate increase cycle was paused in April last year. RBI Governor Shaktikanta Das announced the third bi-monthly monetary policy for the current financial year, stating the Monetary Policy Committee decided to keep the repo rate steady at 6.5 percent.