FX.co ★ Indian Stocks Pull Back after RBI Hike

Indian equities finished sharply lower on Wednesday, with broad-based declines across most sectors after the Reserve Bank of India raised its benchmark policy rate by 25 basis points, in line with expectations. The S&P BSE Sensex slipped 0.6% to 72,639, while the NSE Nifty 50 dropped 0.8% to 22,603.

This marked the RBI’s first rate hike in more than three years, prompted by a renewed uptick in the inflation outlook and mounting pressure on the rupee stemming from capital outflows and surging energy import costs. Higher borrowing costs are expected to dampen credit demand and weigh on corporate earnings, dragging down major index constituents Titan, Asian Paints, Larsen & Toubro, Tata Steel, and Adani Ports, which lost between 2% and 4%.

Technology stocks also retreated, mirroring weakness in US equity markets, with Infosys and HCL Tech each falling around 2%. In contrast, both state-owned and private-sector banks outperformed the broader market, ending the session roughly unchanged on aggregate.