Nifty below 22,700 level; auto shares under pressure

The key equity benchmarks continued to trade with modest losses in mid-morning trade after the RBI raised the repo rate by 25 basis points to 5.50% from 5.25%, in line with expectations. The Nifty traded below the 22,700 level. Auto shares declined after advancing in the past two trading sessions.

At 11:30 IST, the barometer index, the S&P BSE Sensex, tanked 148.37 points or 0.20% to 72,919.44. The Nifty 50 index lost 88.05 points or 0.39% to 22,688.05.

In the broader market, the BSE 150 MidCap Index declined 0.22% and the BSE 250 SmallCap Index rose 0.16%.

The market breadth was negative. On the BSE, 1,972 shares rose and 1,975 shares fell. A total of 254 shares were unchanged.

RBI hikes repo rate by 25 bps to 5.50%

The RBI Monetary Policy Committee (MPC) unanimously raised the repo rate by 25 basis points to 5.50% from 5.25%, in line with expectations, after its three-day meeting on 5-7 October. The RBI raised the repo rate for the first time in nearly three years and changed its policy stance from neutral to calibrated tightening. The Standing Deposit Facility (SDF) rate was raised to 5.25%, while the Marginal Standing Facility (MSF) rate and bank rate remained unchanged at 5.75%.

Buzzing Index:

The Nifty Auto index fell 1.24% to 25,225.50. The index jumped 0.62% in the past two trading sessions.

Bajaj Auto (down 2.46%), Tube Investments of India (down 2.42%), Ashok Leyland (down 2.41%), Hyundai Motor India (down 1.83%), Bharat Forge (down 1.57%), Hero MotoCorp (down 1.35%), Mahindra & Mahindra (down 1.14%), Maruti Suzuki India (down 1.12%), Bosch (down 1.08%) and Tata Motors Passenger Vehicles (down 0.84%) declined.

Global Markets:

Asian indices traded lower on Wednesday while mainland Chinese markets remained closed for a holiday. Investors were tracking Wall Street's record-setting close, movements in US Treasury yields and developments in oil prices.

US stocks ended higher on Tuesday, 6 October 2026, with the S&P 500 and Nasdaq Composite closing at record highs as easing Treasury yields and relatively stable crude oil prices supported risk appetite. The focus has now shifted towards the Federal Reserve's meeting minutes due later on Wednesday and the upcoming third-quarter earnings season.

The Dow Jones Industrial Average gained 253.38 points, or 0.49%, to 51,521.28, while the S&P 500 rose 45.00 points, or 0.58%, to 7,818.93. The Nasdaq Composite advanced 122.48 points, or 0.45%, to 27,599.79. The S&P 500 and Nasdaq both closed at fresh record highs.

Technology and artificial intelligence-related stocks remained important drivers of the rally. Semiconductor shares including Advanced Micro Devices and Marvell Technology gained amid continued optimism over demand for chips and infrastructure supporting artificial intelligence applications. Nvidia also remained near a $6 trillion market valuation, highlighting the continuing strength of the AI investment theme.

The rally also received a boost from the energy sector. Constellation Energy surged after announcing a major long-term electricity agreement with Google. The deal covers 3,590 MW of power, including a 20-year agreement for 890 MW from nuclear capacity and a separate 15-year agreement covering 2,700 MW from Constellation's existing PJM assets. Constellation plans to invest more than $4.3 billion to increase output at 11 nuclear reactor units. The agreement highlights the growing demand for reliable electricity as technology companies expand energy-intensive data-centre and AI infrastructure.

The deal also reinforced investor interest in companies positioned to benefit from the increasing power requirements of AI data centres. Constellation shares rose more than 12% on Tuesday, while other nuclear and power-related stocks also advanced.

US Treasury yields eased from their recent highs, providing some relief to equity markets. The 10-year Treasury yield ended around 5.27%, down roughly 3 basis points, while the two-year yield declined to around 4.80%. The 10-year yield had climbed to about 5.35% on Monday, its highest level in more than two decades, increasing pressure on interest-rate-sensitive assets.

Meanwhile, the US trade deficit widened sharply in August to $105.6 billion, up 13.7% from the previous month and the largest since March 2025. The increase was driven largely by a jump in imports, including crude oil, semiconductors and other goods, with imports reaching a record level.

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