Sensex, Nifty End Lower After Repo Rate Hike

Indian shares ended lower for a fourth day in a row on Wednesday, with inflation and growth worries weighing on markets.

The Reserve Bank of India today raised its key interest rate, the repo, by 50 basis points to 4.90 percent, which was bigger than what economists and markets had expected. The consensus was for a hike to 4.80 percent.

Globally, the European Central Bank is set to draw a line under its massive bond-buying stimulus program on Thursday and signal its first-rate hike in over a decade.

Amid increasing signs of inflation, markets are now pricing in 75 basis points of increases by September.

The U.S. Federal Reserve is expected to raise its benchmark funds rate by 50 basis points next week and again in July.

The World Bank and the Organization for Economic Cooperation and Development both slashed global growth forecasts, citing risks from geopolitical uncertainties due to the war in Ukraine and soaring inflation across the world.

The benchmark S&P BSE Sensex ended a volatile session down 214.85 points, or 0.39 percent, at 54,892.49, extending losses for the fourth straight session.

The broader NSE Nifty index slipped 60.10 points, or 0.37 percent, to close at 16,356.25.

Asian Paints, UPL, Reliance Industries, ITC and Bharti Airtel fell 2-3 percent in the Nifty pack, while BPCL, Dr Reddy’s Laboratories, Titan Company, SBI and Tata Steel rose 1-2 percent.

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