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Benchmark equity indices Sensex and Nifty pared early gains to settle lower on Wednesday (October 9, 2024) due to late selling in index major Reliance Industries, ITC and HDFC Bank even as the RBI took the first step towards a rate cut in its monetary policy review.

Erasing its early gains, the 30-share BSE Sensex fell 167.71 points or 0.21% to close at 81,467.1. During the day, it surged 684.4 points or 0.83% to hit an intraday high of 82,319.21.

The NSE Nifty dropped 31.20 points or 0.12% to end at 24,981.95. In the intraday trade, it jumped 220.9 points or 0.88% to hit a hit of 25,234.05.

The Reserve Bank of India (RBI) kept its key interest rate unchanged on Wednesday but took the first step towards a rate cut as it eased its relatively hawkish policy stance to ‘neutral’.

The monetary policy committee, which included three RBI officials and an equal number of new external members, voted five-to-one to keep the benchmark repurchase or repo rate – which governs the interest rate of home, auto, corporate and other loans – at 6.5% for a 10th straight policy meeting.

Among the 30 Sensex companies, ITC, Nestle India, Hindustan Unilever, Reliance Industries, Larsen & Toubro and HDFC Bank were among the major laggards.

On the contrary, Tata Motors, Tech Mahindra, State Bank of India, Maruti Suzuki India, Bajaj Finance, Axis Bank, Bajaj Finserv and Bharti Airtel were among the gainers.

European markets were trading higher in mid-session deals.

“An upward revision in Q3FY25 inflation reiterates that the sticky inflation continues to remain a concern for the RBI and led investors to book profit towards the close. The volatility in input prices and the impact on margin dragged the FMCG stocks,” Vinod Nair, Head of Research, Geojit Financial Services said.

The change in RBI’s stance to neutral was favourable and expected, but the commentary is not pointing for a rate cut in the near term, Mr. Nair added.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹5,729.60 crore on Tuesday (October 8, 2024), while Domestic Institutional Investors (DIIs) bought equities worth ₹7,000.68 crore, according to exchange data.

In Asian markets, Shanghai, Hong Kong, and Seoul settled in negative territory while Tokyo quoted in the positive territory.

Global oil benchmark Brent Crude climbed 0.87% to $77.85 a barrel in futures trade.

U.S. markets ended with gains in overnight deals on Tuesday.

On Tuesday, the 30-share BSE Sensex rose by 584.81 points or 0.72% to close at 81,634.81. The NSE Nifty jumped 217.40 points or 0.88% to finish at 25,013.15.