Investing.com -- Indian market indices declined on Thursday, led largely by banking and financial stocks, which witnessed a sell-off after the Reserve Bank of India (RBI) imposed a 10% incremental cash reserve ratio (ICRR) on banks starting August 12, in a surprise move today.
While benchmark indices made a lower opening on Thursday, the losses intensified following some of RBI’s announcements. At 03:25 ET (07:25 GMT), headliner Nifty 50 declined 0.35% to 19,563.5 levels and Sensex lost 254.55 points or 0.4%.
The RBI Monetary Policy Committee (MPC) left the repo rate unchanged at 6.5% on August 10, for the third time in a row, as forecast by Investing.com.
However, the central bank raised its inflation forecast to 5.4% in the current financial year 2024 from 5.2% earlier, as RBI Governor Shaktikanta Das underlined a possible increase in the domestic headline inflation for the near term.
The Indian market volatility barometer India VIX jumped 7% in the ongoing session and was last seen trading 4.1% higher at 11.59 points.
The FMCG sector also witnessed a sharp downturn on Thursday, with Nifty FMCG slashing 0.85% at the time of writing.
Banking and financial stocks declined, with all of their sectoral indices under the Nifty umbrella sinking deep in the red as Nifty Bank and Nifty Financial Services tanked up to 1% in the ongoing session.
On the other hand, Nifty Metal jumped nearly 1% on Thursday, significantly defying the overall market mood, with most constituent stocks trading in the green.
Market heavyweights Adani Ports (NS:APSE), Adani Enterprises (NS:ADEL), JSW Steel (NS:JSTL), and ONGC (NS:ONGC) led gains on the Nifty pack.