Stock markets tumble 1 per cent after RBI monetary policy decision

MUMBAI: Benchmark stock indices Sensex and Nifty tanked around 1 per cent on Thursday dragged by selling in banking and auto shares due to increased uncertainty about the timing of interest rate cuts after the RBI’s monetary policy decision.

Erasing all its early gains, the 30-share BSE Sensex fell by 723.57 points or 1 per cent to settle at 71,428.43.

The barometer slipped into red after the announcement of the RBI monetary policy and hit a low of 71,230.62 thereafter, reflecting a loss of 921.38 points or 1.27 per cent.

The Nifty shed 212.55 points or 0.97 per cent to settle at 21,717.95.

The RBI Monetary Policy Committee on Thursday decided to keep policy rate unchanged for the sixth time in a row in view of global uncertainty and the need to bring down retail inflation to 4 per cent.

The RBI also maintained its ‘withdrawal of accommodative stance’.

Announcing the decision of the Monetary Policy Committee (MPC), RBI Governor Shaktikanta Das on Thursday said it has decided to keep the policy repo rate unchanged on the basis of an assessment of the current and evolving macroeconomic situation.

MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target while supporting growth, he said.

“Though FY25 GDP growth forecast has improved, the RBI remains vigilant on inflation & banking liquidity.