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Surprising the market, the Reserve Bank of India (RBI) MPC kept the repo rate unchanged at 6.5%, in its bi-monthly monetary policy
held on October 5. The MPC changed the stance from ‘Neutral’ to
‘Calibrated Tightening’. This indicated that RBI thinks that there is an upward pressure on the interest rates.
Market watchers had widely expected a rate hike of 25 basis points. As a result, the domestic equity market experienced a selling pressure
after the Reserve Bank of India declared its decision.BSE Sensex dives 606 points to 34562.52, while NSE Nifty index tanked below 10,400-mark.
