Sensex falls 244.19 points as RBI delivers first rate hike in nearly 4 years

Indian benchmark indices traded in a narrow range with a negative bias on Oct. 7, 2026, after the Reserve Bank of India delivered its first rate hike in nearly four years. business-standard.com reported that the Sensex fell 244.19 points, or 0.33 per cent, to 72,823.62 by 1:00 PM local time. The Nifty50 dropped 124.40 points, or 0.55 per cent, to settle at 22,651.70.

Real estate stocks decline as volatility index climbs

Selling pressure weighed heavily on select sectors during the mid-day session. Real estate counters experienced notable declines, with Brigade Enterprises, DLF, and Aditya Birla Real Estate emerging as the top losers in the Nifty Realty index, according to business-standard.com. Meanwhile, the Nifty India Volatility Index climbed 5.2 per cent to 14.32, signaling an elevated expectation of near-term market turbulence.

Analysts spotlight banking stocks while asset reconstruction profit rises

Despite the broader market drag, analysts spotlighted specific banking entities based on their technical setups. Religare Broking analyst Ajit Mishra identified Axis Bank, AU Small Finance Bank, and Punjab National Bank as stocks on the radar during the Wednesday session, business-standard.com reported. In the asset reconstruction segment, Asset Reconstruction Company hit a 10 per cent upper circuit after posting a 54.2 per cent year-on-year rise in consolidated net profit, reaching ₹89.2 crore compared to ₹57.8 crore in the previous period.

Governor commentary on monetary policy and currency

Addressing the press during the policy announcement, RBI Governor Sanjay Malhotra discussed several macroeconomic factors affecting the domestic economy. On the subject of low monsoon impacts, the governor noted that agricultural effects have moderated due to increased irrigation and climate-resistant crop varieties. He acknowledged that household incomes will face some impact but expressed confidence that overall incomes will remain resilient.

Regarding external trade, Malhotra stated that potential 100 per cent US tariff rates would clearly impose a negative impact, though existing trade agreements are expected to mitigate the blow. Commenting on the depreciating rupee, he noted that financial markets can exhibit short-term irrationality before finding the currency’s correct long-term value. On domestic liquidity, the governor indicated that surplus conditions will not last long, with excess liquidity expected to be fully absorbed by the end of the financial year.