Nifty and Sensex Extend Losses, Governor Das Pushes Back Against Monetary Policy Pivot

Arjun Pandit
18 Jan, 2024
Mumbai

Stocks in Mumbai edged lower for the second day in a row, and investors confronted elevated tensions in the Middle East, mixed corporate earnings results, and the latest comments from RBI Governor Das.

Reserve Bank of India Governor Shaktikanta Das said economic growth in the current fiscal year is likely to reach 7%, and the central bank is confident of inflation reaching its target rate of 4% in the near term.

Governor Das commented on the sidelines of the World Economic Forum in Davos, Switzerland, an annual four-day gathering of 2,800 business and world leaders and policymakers. 

Governor Das added that when inflation is close to 6%, it is premature to talk about lowering the interest rate, and the central bank's policy has to remain "actively disinflationary."

The central bank also plans to build its foreign exchange reserve from the current level of $617 billion to meet sudden and unpredictable capital outflows witnessed during the global bond market jitters of 2013, when the U.S. Federal Reserve announced its plan to taper off its monetary stimulus.

Tensions remained high in the Middle East, and Pakistan recalled its ambassador from Tehran and expelled the Iranian envoy in Islamabad, a day after Iran carried out a missile strike in Panjgur, Balochistan.

Moreover, the U.S. military carried out strikes on 14 missiles that were ready to be launched from Yemen by Houthi rebels, the Central Command said in a post on its social media X.

 

India Indexes and Yields

The Sensex index decreased 396.62 points to 71,104.14, and the Nifty index fell 132.25 points to 21,439.70.

On the Mumbai stock exchange, 90 stocks traded at their 52-week highs and 5 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds eased 7.17%, and the Indian rupee edged lower to ₹83.15 against the U.S. dollar.

The gold price increased by 0.05% to ₹61,555 per ten grams, and silver rose by 0.05% to ₹71,505 per kilo.

Crude oil increased by 1.1% to ₹6,071 per barrel, and natural gas fell by 1.4% to ₹239.70 per thermal unit.

 

India Stock Movers

HDFC Bank declined 3.5% to ₹1,499.50 and extended two-day losses to close to 10% after the largest private bank reported only a slight gain in its quarterly profit.

ICICI Prudential dropped 6.2% to ₹483.30 after the insurance company said quarterly profit rose less than 3%.

Premium income in the December quarter increased to ₹9,929 crore from ₹9,465 crore, and net income rose to ₹227 crore from ₹221 crore a year ago.

Assets under management rose to ₹2.87 lakh crore from ₹2.52 lakh crore in the previous year's quarter.

Oracle Financial Services soared 19% to ₹6,069.95 after the database provider reported a surge in revenue and profit in its latest quarter.

Revenue in the December quarter jumped 26% to ₹1,823.6, and net income soared 69% to ₹740.8 crore.