SENSEX falls over 500 points, NIFTY50 below 22,600 ahead of RBI's monetary policy decision

The Indian equity benchmarks staged a gap down opening and extended losses on Wednesday, October 7, ahead of the Reserve Bank of India's (RBI) monetary policy decision on interest rates due later in the day.

The SENSEX fell as much as 529 points and NIFTY50 index dropped below its important psychological level of 22,600 on the back of a broad-based selling pressure.

As of 9:42 am, the SENSEX was down 521 points at 72,547 and NIFTY50 index fell 169 points to 22,607.

Meanwhile, Asian markets were trading lower defying record closing in the US markets after crude prices surged in global markets.

Japan's Nikkei fell 0.81%, Hong Kong's Hang Seng index dropped 0.94% and South Korea's KOSPI declined 1.2%.

Oil prices rose as the market participants weighed supply constraints from a storm heading for US oil-producing regions and attacks by Yemen's Iran-backed Houthis on Saudi Arabia against increased supplies of Middle East crude, news agency Reuters reported.

Brent futures rose 93 cents, or 0.92%, to $101.51 a barrel.

Back home, RBI's Monetary Policy Committee (MPC) will announce its decision on interest rates later in the day and it is expected to raise benchmark interest rate by at least 25 basis points as inflationary pressures build and global central banks turn more hawkish, according to economists and bankers.

A rate hike would be the first since February 2023, when the RBI raised the repo rate by 25 basis points to 6.50%.

The central bank subsequently kept rates unchanged through 2023-24 before starting an easing cycle in 2025. The repo rate currently stands at 5.25%.

All the major sector gauges compiled by the National Stock Exchange (NSE) were trading lower led by the NIFTY Consumer Durables index's 1.7% fall. NIFTY Auto, Bank, Financial Services, FMCG, IT, Metal, PSU Bank, Private Bank, Realty and Oil & Gas indices also fell between 0.5% and 1%.

Broader markets were trading on a mixed note as NIFTY Midcap 100 index fell 0.45% while NIFTY Smallcap 100 index was trading on a flat note with a positive bias.

Titan was top loser in the NIFTY50 index after its September quarter business update failed to enthuse investors.

Titan in its quarterly business update said that its total business in second quarter rose 22% and jewellery business advanced 21%

The company's watches business jumped 30% and the company added 34 new stores during the quarter.

SBI Life, Asian Paints, Hindalco, JSW Steel, Bajaj Auto, State Bank of India, Bharat Electronics, Nestle India, Maruti Suzuki and Axis Bank also fell between 1% and 1.77%.

On the flip side, Dr Reddy's Labs, Bajaj Finance, Coal India, Bharti Airtel, Cipla and Jio Financial Services were notable losers in the NIFTY50 index.

The overall market breadth was negative as 1,675 shares were declining while 1,230 were advancing on the NSE.