Investors worriedly eyed global stock markets as the dive in tech stocks on Monday 5 August 2024 impacted indices. Although India’s stock market tripped, it reflected a respectable recovery on Wednesday 7 August 2024, when both the country’s leading indices ended the day with gains.
Indian Market Steady After Global Tech Stock Upheaval
The Sensex closed Wednesday trading up 1.11% and the Nifty 50 was up 1.27%. Mint cited the head of retail research at Motilal Oswal Financial Services, Siddhartha Khemka, who said:
Global factors & headwinds are likely to persist which could continue to impact Indian markets over the next few days. Nifty saw a relief rally, but volatility cannot be ruled out. All eyes will be on RBI policy outcome today where the committee is expected to maintain the interest rate. Hence, interest-sensitive sectors and stocks would be in focus.
As expected, the Reserve Bank of India (RBI) kept the interest rate unchanged at 6.5%. Investing.com reported that Shaktikanta Das, governor of the RBI, emphasised that it will “continue to withdraw accommodative policy to ensure a decline in inflation”.
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The central bank slightly lowered its gross domestic product (GDP) outlook for Q3 2024, but kept the forecast for the year unchanged. India’s Consumer Price Index (CPI) “unexpectedly” rose to 5.1% in June 2024.
Food prices seemed to fuel this upswing as both oil and service prices dropped. The RBI predicted an inflation rate of between 4% and 4.5% towards year-end. During a live stream, Das indicated that there are no immediate plans to adjust the Indian interest rate.
