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Should you dump rate sensitive stocks post the RBI's surprise rate hike?

Real estate and automobiles, which were showing signs of a nascent recovery, will bear the brunt of higher interest rates

Nifty Auto Nifty Bank | Nifty Realty Index | stock market trading

Avdhut Bagkar  |  Mumbai 

bank, interest rates, loan, finance
Illustration by Binay Sinha

The RBI in its bid to tame inflation announced a 40 basis points (bps) hike in repo rate and 50 bps increase in Cash Reserve Ratio (CRR), in an unscheduled meeting on Wednesday. This came as a shocker for the markets, and the benchmark indices ended with heavy losses of over 1,300 points or 2.30 per cent for the BSE Sensex and 392 points or 2.29 per cent on the Nifty 50.

Real estate and automobiles, which were showing signs of a nascent recovery, will bear the brunt of higher interest rates following the central bank’s rate hike because customers will delay buying new homes and cars. READ ABOUT IT HERE



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First Published: Thu, May 05 2022. 11:45 IST