Indian stock market crashes over 1,000 points after RBI's surprise repo rate hike
Equity markets fell sharply in late afternoon trade on Wednesday, with the Sensex crashing 1,060.64 points after the Reserve Bank hikes interest rates, makes loans costlier and EMI will have to be paid more.
Because of the ever-increased inflation, the Reserve Bank of India has increased the repo rate from 4% to 4.4%, which has remained stubbornly above the target zone of
6 per cent for the last three months.
The decision follows an unscheduled meeting of the Monetary Policy Committee (MPC), with all six members unanimously voting for a rate hike while maintaining the accommodative stance. The Governor said the decision taken in view of rising inflation, geo-political tensions, high crude oil prices and shortage of commodities globally, which have impacted Indian economy.
From the Sensex pack, Bajaj Finserv, Bajaj Finance, Titan, HUL, RIL, Asian Paints and HDFC Bank were the prominent losers.
In contrast, PowerGrid, Kotak Mahindra Bank, NTPC were the gainers.
At end of day the market closed down 800 points.