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Stock Market Today: BSE Sensex plunges over 600 points following RBI credit policy announcement

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Shillong, February 8: After the Reserve Bank of India (RBI) unveiled its credit policy, the BSE Sensex experienced a significant downturn, with banks leading the decline. The Sensex recorded a substantial drop of 628.92 points or 0.87%, trading at 71,523.08 points.

As per IANS, Key players like Axis Bank, ICICI Bank, and Nestle faced declines exceeding 2%, contributing to the private banks index slipping by more than 1.5%. Additionally, Au Bank and Kotak Mahindra Bank witnessed a 2% decrease each.

FMCG stocks were also adversely affected, with the index witnessing a 1.2% fall. Tata Consumer, Britannia, and Jyothy Labs faced drops of 2%, 2%, and 3%, respectively.

Suman Chowdhury, Chief Economist and Head of Research at Acuité Ratings & Research, remarked on the RBI’s decision to maintain interest rates for the sixth consecutive time. Despite market expectations, the RBI adopted a hawkish stance, refraining from indicating the timing of a shift in monetary stance away from “withdrawal of accommodation.”

Chowdhury noted that, given the MPC statement’s tone and the anticipated growth momentum, the likelihood of an RBI rate cut in the next six months has considerably diminished. Expecting short-term rates to remain elevated, he also predicted a potential increase in bank deposit rates by 25-50 basis points, considering the ongoing disparity between credit and deposit growth.

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