Interest rate-sensitive realty, auto and bank stocks declined on Wednesday after the Reserve Bank of India (RBI) expectedly raised the key interest rate by 35 basis points (bps) in a move to bring down inflation to a tolerable limit.
This was the fifth consecutive rate hike after a 40 basis points increase in May and 50 basis points hike each in June, August and September. In all, the RBI has raised the benchmark rate by 2.25 per cent since May this year.
From the realty pack, Sobha tanked 5.59 per cent, Oberoi Realty 3.66 per cent, Brigade Enterprises 2.48 per cent, Godrej Properties 2.35 per cent and DLF dropped 1.28 per cent.
On the other hand, Indiabulls Real Estate jumped 2.47 per cent, Macrotech Developers gained 1.13 per cent and Phoenix Mills rose 0.74 per cent.
The BSE realty index declined by 1.11 per cent.
Among auto counters, Tata Motors fell 1.68 per cent, followed by Bajaj Auto (1.54 per cent), TVS Motor Company (1.38 per cent), Hero Moto Corp (1.35 per cent), and Eicher Motors (1.01 per cent).
However, Mahindra & Mahindra closed in the green.
The auto index ended 0.76 per cent lower.
Among bank stocks, Federal Bank fell 1.93 per cent, IndusInd Bank 1.64 per cent, Kotak Mahindra Bank 1.24 per cent, State Bank of India 0.33 per cent and HDFC Bank shed 0.12 per cent.
In contrast, AU Small Finance Bank advanced 3.48 per cent, Bank of Baroda gained 1.18 per cent, Axis Bank was up by 1.12 per cent and Bandhan Bank rose 0.98 per cent.
However, the BSE bank index slipped by 0.11 per cent.
The 30-share BSE benchmark Sensex fell 215.68 points or 0.34 per cent to settle at 62,410.68 points.
Home, auto and other loan EMIs will rise after the RBI on Wednesday raised the key lending rate or the repo rate by 35 basis points to 6.25 per cent.
Terming the Indian economy a bright spot in an otherwise gloomy world, the central bank lowered its estimate of GDP growth to 6.8 per cent in the fiscal ending March 31, 2023, from an earlier forecast of 7 per cent.
It, however, kept the inflation forecast unchanged at 6.7 per cent for the current fiscal and projected it to come below the upper tolerance limit of 6 per cent in the fourth quarter of the current financial year.
With the latest hike, the repo rate or the short-term lending rate at which banks borrow from the central bank has crossed 6 per cent.