Indian stock market's benchmark Sensex opened 205 points down on Wednesday as the Reserve Bank of India (RBI) increased the policy repo rate by 50 basis points to 4.9 per cent.
The 30 stock S&P BSE Sensex fell 205.27 points or 0.37 per cent to close at 54,902.07 points at 10:30 am.
The broader Nifty 50 of the National Stock Exchange fell 53.05 points or 0.32 per cent to 16,363.30 points.
There was selling pressure in telecom and healthcare stocks. GTL Infrastructure fell 4.83 per cent to Rs 1.38. Bharti Airtel slipped 1.17 per cent to Rs 677.90. MTNL closed 0.70 per cent down at Rs 21.30.
In the Healthcare sector, Metropolis Lab slumped 2.65 per cent to Rs 1551.20. Max Healthcare fell 2.49 per cent to Rs 357.75. NGL Fine-Chem slipped 1.99 per cent to Rs 1838.
Only ten out of the 30 stocks that are part of the benchmark Sensex opened in the positive.
Top Sensex gainers were NTPC Limited, Tata Steel, and State Bank of India.
The Reserve Bank of India (RBI) on Wednesday announced to increase the policy repo rate by 50 basis points to 4.9 per cent, the second hike in five weeks aimed at quelling the inflation.
The Monetary Policy Committee (MPC) vote was unanimous and has decided to keep stance withdrawal from accommodative, RBI Governor Shaktikanta Das said in a press conference today.
Consequently, the RBI Governor said that the standing deposit facility - the SDF rate - stands adjusted to 4.65 per cent and the marginal standing facility - MSF rate and bank rate - to 5.15 per cent.
With the assumption of a normal monsoon, in 2022 and an average crude oil price in the Indian basket of 105 dollars per barrel, the RBI has projected inflation at 6.7 per cent in 2022-23.
"According to the provisional estimates released by the National Statistical Office on May 31st, India's GDP growth ins 2021-22 is estimated at 8.7 per cent. This level of real GDP in 2021-22 has exceeded the pre-pandemic, i.e., 2019-20 level," Das said.
Last month, in its off-cycle monetary policy review the central bank hiked the policy repo rate by 40 basis points or 0.40 per cent to 4.4 per cent. This was the first increase in the policy repo rate in nearly two years. The repo rate is the interest rate at which the RBI lends short-term funds to banks.
India's Consumer Price Index (CPI) based inflation surged to an eight-year high of 7.79 per cent in April, above the RBI's 2-6 per cent target band since the beginning of this year.