3 hrs ago
RBI Rate Hike Sends Indian Markets Lower
India’s central bank raised the interest rate it uses to guide borrowing costs.
It also said it would take a more cautious approach to keeping prices under control.
Investors worried that higher rates and inflation could make business conditions harder, so major stock market measures fell.
Metal companies’ shares dropped the most among the sectors mentioned.
Some public-sector bank and media shares did better.
The bank also raised its forecast for economic growth and its forecast for inflation.
The rupee weakened, while oil prices rose above $101 a barrel.
Analysts expect any further rate increases to be limited, but they differ on how much more tightening may come.
The Reserve Bank of India raised its repo rate by 25 basis points to 5.50% and shifted its stance to “calibrated tightening.”
The Nifty 50 fell 0.76% to 22,603.05, while the Sensex dropped 0.59% to 72,638.70.
The RBI raised its FY27 GDP growth forecast to 7.1% and its inflation projection to 5.2%.
Metals fell the most among sectors, while PSU banks and media were among the few outperformers.
The rupee weakened as crude prices, risk aversion, foreign investor outflows and global bond yields weighed on sentiment.
- Who
- The Reserve Bank of India, Indian investors and financial markets.
- What
- The RBI raised the repo rate by 25 basis points to 5.50% and changed its policy stance to calibrated tightening; equity benchmarks fell.
- Where
- India.
- When
- Wednesday; the report was published on October 7, 2026.
- Why
- Investors weighed the rate increase, higher inflation outlook and tighter policy stance, alongside global and currency-market pressures.
Key facts
- Repo rate
- Raised by 25 basis points to 5.50%.
- RBI policy stance
- Changed to “calibrated tightening.”
- Nifty 50 close
- 22,603.05, down 173 points or 0.76%.
- Sensex close
- 72,638.70, down 429 points or 0.59%.
- FY27 GDP growth forecast
- Raised by 40 basis points to 7.1%.
- Inflation projection
- Raised to 5.2%.
- USD/INR
- Touched 96.85 during the session.
- Brent crude
- Rose above $101 a barrel.
Quotes
Rajiv Sabharwal
Managing Director and CEO of Tata Capital.
“The RBI hiking FY27 GDP growth by 40bps to 7.1 per cent reflects the strength and resilience of the Indian economy”
thehindubusinessline.com
“We see [a] shallow rate hike cycle of another 50bps over [the] next 6 months”
thehindubusinessline.com
Sources
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