Surprise Twist by RBI Knocks Indian Banks and Indices Down; Metals Shine Bright, Defying the Flow
Well, well, well, the Indian market had its share of rollercoaster drama on Thursday. Just when you thought things were chugging along, bam! The banking and financial stocks took a wild plunge, all thanks to the Reserve Bank of India (RBI) throwing in a curveball. Picture this: RBI slapped a 10% incremental cash reserve ratio (ICRR) on the banks out of the blue, starting August 12. Talk about an unexpected plot twist!
As the sun rose on Thursday, the benchmark indices put on their serious faces, gearing up for what was to come. And boy, did things escalate quickly after RBI stepped onto the scene. At 03:25 ET (07:25 GMT), the Nifty 50, that headline act, was down by 0.35%, sulking at 19,563.5 levels. The Sensex, not one to be outdone, shed 254.55 points or 0.4% of its charm.
Now, here’s the kicker: the RBI Monetary Policy Committee (MPC), in a move that kept everyone on their toes, decided to leave the repo rate unchanged at 6.5% on August 10. Hold your horses, this is the third time in a row, just as forecasted by the savvy folks at Investing.com.
But wait, there’s more! The central bank, always one to keep us guessing, shook the crystal ball and upped its inflation forecast for the current financial year 2024. We’re talking 5.4%, folks, up from the earlier 5.2%. RBI Governor Shaktikanta Das, the master of suspense, hinted at a potential rise in domestic headline inflation for the near future. Cue the suspenseful music!
Picture this: the Indian market’s own thrill ride, the India VIX, decided to play along. It leaped a whopping 7% in this session alone, putting on a show that left us all wide-eyed. As the curtain dropped, it was still trading a sprightly 4.1% higher at 11.59 points. Bravo, VIX, bravo!
Oh, but wait, there’s more drama on this stage! The FMCG sector decided to join the party, but it wasn’t in a celebratory mood. Nifty FMCG threw a bit of a tantrum, slashing down by 0.85% while everyone watched.
Now, let’s talk about the banking and financial stocks. They showed up to the party, but instead of dancing the night away, they took a nosedive. It was a sea of red, my friends, as Nifty Bank and Nifty Financial Services took a tumble of up to 1% during this ongoing session. Someone pass them a tissue, please.
But here comes the surprise twist within the twist: Nifty Metal wasn’t one to follow the script. Nope, it decided to break free from the gloomy mood and jumped up nearly 1% on Thursday. Like a rebel with a cause, most of its stocks strutted around in the green zone, thumbing their noses at the market’s expectations.
And who stole the spotlight, you ask? The heavyweight champs of the Nifty pack, of course! Adani Ports (NS:APSE), Adani Enterprises (NS:ADEL), JSW Steel (NS:JSTL), and ONGC (NS:ONGC) strutted their stuff, leading the gains and showing the world how it’s done.
In a nutshell, it was a day of unexpected plot twists, dramatic dives, and surprising stars. The Indian market sure knows how to keep us on the edge of our seats!
