RBI rate hike: How rate-sensitive stocks are performing after 25 bps repo rate increase

The RBI's Monetary Policy Committee raised the benchmark policy rate from 5.25 per cent to 5.50 per cent. The decision came after the central bank kept the repo rate unchanged in its previous policy meeting.

Announcing the monetary policy decision, RBI Governor Sanjay Malhotra said the re-escalation of the West Asia conflict in September, along with the hardening and volatility in global crude oil prices, had weighed on global economic sentiment and increased financial market volatility.

The Nifty Auto index fell 1.44 per cent after the rate hike, with most major auto stocks trading lower.

Ashok Leyland was among the biggest losers in the segment, declining 2.67 per cent. TI India fell 2.56 per cent, while Bajaj Auto declined 2.31 per cent.

Bharat Forge was down 1.94 per cent, followed by TVS Motor at 1.84 per cent and Hero MotoCorp at 1.82 per cent.

Hyundai Motor India fell 1.63 per cent, while Mahindra & Mahindra declined 1.45 per cent. Bosch was down 1.34 per cent and Maruti Suzuki fell 1.11 per cent.

Among other auto stocks, Tata Motors Passenger Vehicles (TMPV) declined 1.08 per cent, Motherson fell 0.91 per cent and Uno Minda was down 0.81 per cent. Eicher Motors declined 0.67 per cent, while Sona BLW Precision Forgings fell 0.23 per cent.

Banking stocks showed a mixed reaction after the RBI's rate action, with the Bank Nifty recovering from initial weakness and moving into positive territory.

Kotak Mahindra Bank led the gains, rising 1.69 per cent. Union Bank of India gained 1.42 per cent, while Canara Bank and Federal Bank rose 0.89 per cent and 0.72 per cent, respectively.

Punjab National Bank gained 0.63 per cent, while ICICI Bank and Axis Bank were up 0.16 per cent and 0.15 per cent, respectively.

State Bank of India was marginally lower, while Bank of Baroda declined 0.32 per cent. HDFC Bank fell 0.56 per cent.

Among other lenders, Yes Bank declined 0.62 per cent, AU Small Finance Bank fell 0.71 per cent, IDFC First Bank dropped 1.30 per cent and IndusInd Bank declined 1.34 per cent.

The Nifty Private Bank index was up 0.25 per cent, indicating some resilience among private lenders despite the rate hike.

The Nifty Financial Services index was down 0.14 per cent.

Kotak Mahindra Bank gained 1.69 per cent, while Power Finance Corporation (PFC) rose 1.13 per cent. Bajaj Finance gained 0.33 per cent, while ICICI Bank and Axis Bank were marginally higher.

HDFC Life Insurance gained 0.09 per cent.

However, several financial stocks remained under pressure. Shriram Finance declined 1.98 per cent, while Cholamandalam Investment and Finance fell 2.05 per cent.

Bajaj Finserv declined 0.87 per cent, Muthoot Finance fell 0.80 per cent and ICICI Lombard General Insurance declined 0.71 per cent.

Realty stocks, another rate-sensitive segment, also traded lower after the RBI rate hike.

The Nifty Realty index declined 0.67 per cent.

Brigade Enterprises fell 1.40 per cent, while Prestige Estates Projects declined 1.27 per cent. Godrej Properties fell 1.18 per cent and DLF declined 0.67 per cent.

Lodha fell 0.65 per cent, Oberoi Realty declined 0.53 per cent and Phoenix Mills slipped 0.42 per cent.

However, Anant Raj gained 0.97 per cent and Sobha rose 0.47 per cent.