Indian Socks Drop for 4th Session

The BSE Sensex closed 215 points lower at 62,410 on Wednesday, the fourth consecutive decline since reaching a record-high last week as investors digested the RBI’s monetary policy decision and fresh projections for the Indian economy.

The central bank raised its key repo rate by 35bps to 6.25%, broadly in line with expectations and adding to the 225bps in interest rate hikes since the start of the banks’ tightening cycle in May.

Additionally, policymakers signaled at least one more rate hike ahead as inflation still hovers above the central bank’s upper target of 6%, although rate increases are expected to continue at a slower pace.

The RBI kept inflation forecasts for the current financial year unchanged at 6.7% but revised growth projections down by 0.2 pp to 6.8%.

Expectations of further rate hikes offset lower oil prices and drove Mumbai’s auto manufacturers to close in the red, led by 1.7% declines for Tata Motors and Bajaj Auto.