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Nifty falls 0.76% on RBI repo-hike day as FPIs sell ₹6,121 crore; RBI sets ₹2 lakh crore 29-day VRRR, strikes Paytm Payments Bank off its schedule

The Nifty 50 fell 173 points to 22,603.05 on the day RBI raised the repo rate by 25 bps to 5.50%; metals, realty, autos and IT led the fall while PSU banks rose 1%. FPIs were net sellers of ₹6,121.37 crore, DIIs net buyers of ₹4,596.57 crore. T-bill cut-offs rose up to 14 bps. Today RBI drains liquidity for 29 days, and it has formally removed Paytm Payments Bank from the list of scheduled banks.

Capital Chronicle Desk~5 minDual-layer

60-sec

Market close, Wed 7 Oct 2026 (RBI decision day), NSE data at 3:30 p.m.:

IndexCloseChange
Nifty 5022,603.05−173.05 (−0.76%)
Nifty Bank55,055.55−0.13%
Nifty PSU Bank8,088.70+1.00%
Nifty Metal12,306.70−2.33%
Nifty Realty822.60−1.77%
Nifty Auto25,138.90−1.58%
Nifty IT27,757.80−1.34%
Nifty Housing11,119.85−1.04%
Nifty Midcap 10059,382.60−0.63%
Nifty Smallcap 10019,506.95+0.30%
India VIX13.93+2.35%

Only 9 of the 50 Nifty stocks rose.

Flows (NSE, provisional, 7 Oct): FPIs net sold ₹6,121.37 crore; DIIs net bought ₹4,596.57 crore.

Rupee: FBIL reference rate ₹96.6230 per US dollar (1 p.m., 7 Oct), against ₹96.4348 a day earlier — about 19 paise weaker.

RBI liquidity today (Thu 8 Oct): a 29-day Variable Rate Reverse Repo (VRRR) for ₹2,00,000 crore, window 9:30–10:00 a.m., reversing on 6 Nov. Yesterday’s overnight VRRR drew ₹2,55,827 crore against ₹3,00,000 crore notified, at 5.49%; that money returns to banks today.

Paytm Payments Bank: RBI says it has been excluded from the Second Schedule to the RBI Act — formally no longer a scheduled bank.

Takeaway: Equities fell, bond yields edged up and FPIs sold on the first day of RBI’s new tightening stance. Not investment advice.

Analysis

How the market took the hike

RBI’s Monetary Policy Committee raised the repo rate by 25 bps to 5.50% and moved its stance to calibrated tightening, saying rate cuts are off the near-term table (decision story). The Nifty 50 opened at 22,690.45, traded between 22,546.30 and 22,717.65, and closed at 22,603.05, giving back most of Tuesday’s 0.98% gain.

The split inside banking matters. PSU banks rose 1.00% (10 of 12 stocks up) while the Nifty Bank slipped only 0.13% and private banks were flat (+0.08%). Rate-sensitive sectors with more borrowing exposure fell harder — realty −1.77%, autos −1.58% (all 15 stocks down), housing −1.04%. Metals (−2.33%) were the weakest sector index, with all 15 constituents lower.

NSE’s 10-year benchmark G-sec index fell 0.15%. A lower bond-price index means higher yields.

FPIs sell again; DIIs absorb about three-quarters

FPIs were net sellers of ₹6,121.37 crore on 7 Oct, after ₹2,961.30 crore on 6 Oct (NSE provisional data). DII net buying of ₹4,596.57 crore covered about 75% of the FPI outflow; the net of the two was −₹1,524.80 crore (Capital Chronicle arithmetic).

T-bill yields reset higher

At RBI’s weekly Treasury Bill auction on 7 Oct, cut-off yields were:

7 Oct cut-offPrevious auctionChange (CC arithmetic)
91-day5.5747%5.5199%+5.5 bps
182-day6.0999%5.9601%+14.0 bps
364-day6.2869%6.1798%+10.7 bps

Demand stayed strong: the 91-day paper drew competitive bids of ₹38,721 crore for ₹8,000 crore notified.

Liquidity: RBI goes longer

RBI has run 55 VRRR auctions since the August policy, by its own count on 7 Oct. Now it has announced a 29-day VRRR for ₹2 lakh crore today. Banks can reverse their money early through RBI’s E-Kuber portal, with requests placed at least two working days before the original reversal date. Locking surplus cash away for four weeks is consistent with the MPC’s aim, stated on 7 Oct, of aligning the overnight call rate with the repo rate. The 7 Oct overnight auction drew bids worth about 85% of the amount offered (CC arithmetic).

Paytm Payments Bank: the formal last step

RBI’s press release of 7 Oct says Paytm Payments Bank Limited (PPBL) was excluded from the Second Schedule to the RBI Act, 1934, by a notification dated 31 July 2026, published in the Gazette on 7 Sep 2026. A scheduled bank is one listed in this Second Schedule.

Background from One 97 Communications’ (Paytm) own exchange filing with its June-quarter results:

  • RBI cancelled PPBL’s banking licence by a press release dated 24 April 2026.
  • On 25 April 2026, PPBL’s shareholders approved resolutions to enable its winding-up, either as directed by RBI or voluntarily with RBI’s permission.
  • One 97 says it has no exposure to PPBL, no material business arrangements with it, and no board or management role; it had fully impaired its investment in PPBL by 31 March 2024, after RBI’s 31 January 2024 directions restricting PPBL’s business.

One 97 Communications (NSE: PAYTM) closed at ₹1,732 on 7 Oct, up 2.24%, per NSE data. The exclusion formalises the April licence cancellation; RBI’s release announces no other action.

Global markers (as of the latest close)

  • US Treasury yields (7 Oct, US Treasury par curve): 2-year 4.77%, 10-year 5.28%, 30-year 5.67% (6 Oct: 4.79% / 5.27% / 5.64%).
  • Crude oil: Brent near $101.5 a barrel and WTI near $89.4 in early Asian trade on 8 Oct (indicative market data, not an official benchmark).

What to watch today

  1. 29-day VRRR result after 10:00 a.m. — how much of the ₹2 lakh crore banks offer
  2. FPI flows after ₹9,082.67 crore of net FPI sales across 6–7 Oct (CC arithmetic)
  3. IPO listings of Vishal Nirmiti, Nityas Gems and Eventions (listing-day story)
  4. September CPI on 12 Oct

Sources

Business. Markets. Money. Free.
Corrections: corrections@capitalchronicle.news

India markets & business. Free.
Not personalized financial advice. Corrections: corrections@capitalchronicle.news