RBI rate hike may halt rally in BFSI sector, pressure on bank NIMs seen

Broader markets, especially automobile stocks, may also react negatively going ahead

In its last monetary policy of the calendar year, the Reserve Bank of India (RBI) opted to hike policy rates by 35 basis points (bps) and affirmed monetary tightening would continue.
 

The market reaction was marginal, with the Nifty50 Index down 0.44 per cent and the Bank Nifty down 0.1 per cent. The optimists had expected the RBI to hit the pause button after the US Federal Reserve signalled it was softening its hawkish stance. 
 

India’s central bank has hiked the repo rate by 225 bps since May. The consensus expectation is another 0.25 per cent (or 25 bps) hike