Interest rate-sensitive bank, auto and realty stocks ended on a mixed note on Wednesday after the Reserve Bank of India (RBI) hiked the policy rate.
Home, auto and other loan EMIs will rise after the RBI on Wednesday raised the key interest rate by 50 basis points (bps), the second increase in five weeks, to rein in a rise in prices that was seen continuing to hurt consumers in the near term.
The increase in lending rate or the repurchase rate (repo) by 50 bps -- the biggest in more than a decade -- to 4.90 per cent comes on the back of a 40 bps hike last month at an unscheduled meeting that kicked off the tightening cycle.
Simultaneously, the pandemic era's accommodative stance was dropped, which meant more hikes may be in the offing to tame inflation that since the start of the year has been hovering above the central bank's upper tolerance limit.
Among bank stocks, SBI jumped 1.66 per cent, Bank of Baroda gained 1.57 per cent, Bandhan Bank (1.04 per cent) and HDFC Bank (0.33 per cent).
In contrast, AU Small Finance Bank dipped 1.05 per cent, Axis Bank (1.03 per cent), IndusInd Bank (1.01 per cent), ICICI Bank (0.78 per cent), Kotak Mahindra Bank (0.65 per cent) and Federal Bank (0.11 per cent).
The BSE bank index ended flat, lower by 0.18 per cent at 40,304.75.
''The 50 bps rate hike in policy repo rate is in line with our expectations of RBI remaining front-loaded on rate hikes, after un-anchoring markets' policy expectation in Apr/May,'' said Madhavi Arora, Lead Economist, Emkay Global Financial Services.
From the auto pack, Maruti gained 1.08 per cent, TVS Motor (0.87 per cent), Hero MotoCorp (0.67 per cent) and M&M (0.36 pr cent).
In contrast, MRF declined by 1.47 per cent, Bajaj Auto (1.07 per cent), Ashok Leyland (0.79 per cent), Tata Motors (0.08 per cent) and Eicher Motors (0.05 per cent).
The BSE auto index gained marginally by 0.07 per cent to settle at 25,944.59.
Among the realty counters, Macrotech Developers jumped 5.03 per cent, Sobha Limited gained 3.08 per cent, Sunteck Realty (2.99 per cent), DLF (2.35 per cent), Brigade Enterprises (1.98 per cent), Oberoi Realty (1.78 per cent), Godrej Properties (1.68 per cent) and Phoenix Mills (0.43 per cent). Prestige Estates Projects fell by 1.25 per cent.
The BSE realty index jumped 1.88 per cent to 3,218.41.
In the broader market, the 30-share BSE benchmark dropped 214.85 points or 0.39 per cent to settle at 54,892.49.
''Domestic markets witnessed a volatile session on the day of the key event of RBI MPC outcome where RBI announced 50 bps hike in repo rate to 4.90 per cent with focus on curbing inflation. Market continued with range bound movement as the RBI event was on expected lines. There are concerns in the market with respect to high crude oil prices,'' said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.
(With PTI inputs)
