Indian markets closed lower on Wednesday, with the Bombay Stock Exchange Sensex falling by 114 points to end at 28,220.98, and the National Stock Exchange slipping 25 points to close at 8,743.95, NDTV reported. This comes a day after the newly-formed Monetary Policy Committee cut the Reserve Bank of India's key repo rate – the rate at which it lends to commercial banks – by 25 basis points (or 0.25%) to 6.25%.
The drop in markets was led by profit booking (the selling of shares to realise gains) in stocks from sectors such as banking, information technology and oil and gas. Companies such as ICICI Bank, Infosys, Tata Consultancy Services and HDFC Bank were among those affected by the profit taking. Bharti Infratel, Larsen & Toubro and Eicher Motors were among the day's gainers. "It's a pure technical correction and normal profit booking," said Managing Director of Taurus Asset Management RK Gupta.
Markets also traded lower in the morning as Asian markets fell on expectations of a policy rate hike by the United States Federal Reserve. Separately, the International Monetary Fund on Tuesday said India's gross domestic product will grow by 7.6% in 2016-'17, which led to markets making early gains before falling.
Remarks made by Federal Reserve officials on the central bank's need to raise rates to control inflation also led to Pacific-Asia markets such as Australia's S&P/ASX to fall by 0.5% during intra-day trading, according to AP. However, Hong Kong's Hang Seng index rose by 0.4%, while Japan's Nikkei 225 rose by 0.5% during the course of the trading day. Investors expect the Fed to wait till December to enact a rate hike.
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