The standing deposit facility rate and the marginal standing facility rate were also increased by the same quantum to 5.65 per cent and 6.15 per cent, respectively
The Indian equity benchmarks rebounded from intraday low levels after the Reserve Bank of India's 50 basis points rate hike came in line with market expectations. The Sensex jumped over 500 points from day's lowest level and Nifty 50 index touched an intraday high of 17,837 and after hitting low of 17,747.
Reserve Bank of India Governor Shaktikanta Das-led six-member Monetary Policy Committee (MPC) decided in ratio of 5:1 to hike key interest rate - repo rate - by 50 basis points to 5.9 per cent to tame the inflation which has been above its tolerance level of 2-6 per cent for eighth consecutive month.
The standing deposit facility rate and the marginal standing facility rate were also increased by the same quantum to 5.65 per cent and 6.15 per cent, respectively.
While announcing rate hike, Governor Das said, world has been confronted with one crisis after another while Indian economy remains resilient.
Rate sensitive banking, financial services and real estate sector shares staged a bounce back after RBI's policy decision The Nifty Bank and Financial Services indices jumped over 1 per cent following RBI's decision. Auto, Private Bank, PSU Bank and Realty indices also moved over 1 per cent from intraday lows.
On the other hand, IT, pharma, healthcare and consumer durable stocks were witnessing a mild selling pressure.
ONGC was top Nifty gainer, the stock rose 3.43 per cent to Rs 131. Power Grid, Hindalco, Kotak Mahindra Bank, Ultratech Cement, Reliance Industries, Bharat Petroleum, HDFC Bank, Titan and HDFC also rose between 1.2-3 per cent.
On the flipside, Dr Reddy's Labs, Asian Paints, Tata Motors, Coal India, TCS, Tech Mahindra, HCL Tech, Infosys and Adani Enterprises were among the losers.