IT, Metal Stocks Bring Back The Bear; Drag Indian Share Market 600 Points In Opening Trade

Share Market News | New Delhi: Indian share market opened on a weak note on Friday. IT stocks and Metal stocks dragged the market 600 points lower. As of 9:25 AM, Sensex was trading at 54,724, 595 points or over 1 per cent lower than the previous close. Nifty50 was trading at 16,315, 162 points or 1 per cent below the previous close. Only 8 out of 50 stocks in the index were trading in the red with Wipro, Hindalco and Tech Mahindra being the top losers.Also Read – Pakistan Is Now Asia’s Third Worst Performing Stock Market

In Sensex, 26 out of 30 stocks were trading in the red. Wipro, Tech Mahindra and Infosys were the top losers. Only Power Grid, Maruti, NTPC and Titan were in the green. In IT stocks, Wipro, Coforge and Mindtree were the top losers. In Metal stocks, National Aluminium and Hindalco were the top losers. Only Ratnamani and APLApollo were the metal stocks trading in the positive. Also Read – Rupee Hits All-Time Low Against USD Twice In Two Days; What’s Spooking Our Currency? Know Here

RBI Policy and its aftermath

The Reserve Bank of India (RBI) hiked its repo rate by 50 basis points to 4.9 per cent in a second hike in two months. This came as RBI bid to double down in taming the inflation. However, to ensure adequate liquidity in the economy, the central bank did not change the Cash Reserve Ratio (CRR). Stock markets have been highly volatile since the decision was announced. Also Read – One-Fourth Of LIC Market-Cap Wiped Off As Share Price Hits All-Time Low

Speaking to india.com, Mr.Sandeep Bagla, CEO, Trust Mutual Fund said, “Markets expect regulators to have better information and hence act proactively in order to maintain macro stability and equilibrium. Regulators need to prioritize their target variable between growth and inflation. In India, we have raging inflation at 7.8%, higher capacity utilization, and growing consumer confidence, and yet the policy rate has been hiked to 4.90% only, which is lower than pre-pandemic levels. The ideal effective overnight rate should be closer to 6%, but at this pace, it might take us 3-4 policies more to reach there.”

He continued, “Monetary policies tend to work with significant lags on the real economy. The longer we wait in raising rates adequately, the more we are letting the underlying inflationary fires simmer. Don’t expect inflationary expectations to come down and most likely the 10-year G-sec yield would trade between 8.25-8.50 in the next couple of quarters.”