The benchmark equity indices on the BSE and National Stock Exchange (NSE) ended lower for the third consecutive session, falling nearly 2.3 per cent on Wednesday after the Reserve Bank of India (RBI) increased the repo rate to 4.40 per cent in a bid to contain inflation. The S&P BSE Sensex crashed 1,306.96 points (2.29 per cent) to end at 55,669.03 while the Nifty 50 declined 391.50 points (2.29 per cent) to settle at 16,677.60. Both the indices had opened on a choppy note earlier in the day but declined sharply in the late afternoon deals after the central bank increased the benchmark lending rate by 40 basis points to 4.40 per cent in a bid to contain inflation, which has remained stubbornly above the target zone of 6 per cent for the last three months. On the BSE benchmark, the Bajaj twins comprising of Bajaj Finance and Bajaj Finserv were the top losers on Wednesday. They were followed by Titan Company, IndusInd Bank, HDFC Bank, Maruti Suzuki India, Reliance Industries (RIL), Asian Paints and Axis Bank. On the other hand, just Power Grid Corporation of India, NTPC and Kotak mahindra Bank were the only gainers. All the sectoral indices on NSE ended sharply lower. The Nifty Realty index fell 3.27 per cent dragged by Sunteck Realty, Indiabulls Real Estate and DLF. The Nifty Auto index declined 2.54 per cent weighed by Ashok Leyland, TVS Motor Company and Bajaj Auto. The key Bank Nifty slumped 2.49 per cent due to a fall in IndusInd Bank, HDFC Bank and Bandhan Bank. In the broader markets, the S&P BSE MidCap index fell 638.66 points (2.63 per cent) to end at 23,665.32 while the S&P BSE SmallCap declined 599.19 points (2.11 per cent) to settle at 27,762.59. On the NSE, the volatility index or India VIX surged 7.86 per cent to 21.8775. "Although the rate hike was anticipated, the sudden announcement of a 40 bps increase in repo rate along with a 50 bps increase in CRR in response to the rising inflation spooked markets leading to a heavy selloff. Global markets are also trading cautiously ahead of the upcoming Fed meeting, as an increase of more than 50 bps will extend the current consolidation phase," said Vinod Nair, Head of Research at Geojit Financial Services.
