RBI monetary policy: Rate sensitive shares trading lower in early deals

Rate-sensitive stocks such as auto, realty, financial services and banking were in focus today ahead of the outcome of Reserve Bank of India's (RBI) Monetary Policy Committee meeting. A majority of analysts and economists opined that the central bank was likely to announce a hike in repo rate to the tune of 50 bps.

Meanwhile, auto sector stocks were trading in the red. The BSE auto index was down 229 points with TVS Motor being the top loser (2.53 per cent) followed by Uno Minda, Tata Motors, M&M and Ashok Leyland. Realty stocks were also trading lower with Lodha Developers, Prestige, Brigade Enterprises and Sunteck falling up to 2.37 per cent in early trade. The BSE realty index was also trading lower at 21 points at 3291.

RBI MPC meet: Economists and analysts expect a rate hike of 50 bps

Banking shares too were trading in the red with BSE bankex down 59 points to 42,989. Top losers in the banking index were AU Small Finance Bank, Federal Bank, Bandhan Bank, IndusInd Bank and SBI, falling up to 1.43 per cent ahead of the RBI's monetary policy outcome.

IIFL Founder and Chairman Nirmal Jain told Global Business Editor at Business Today TV Udayan Mukherjee earlier this week that short-term lending rate or repo rate may go up by 50 basis points yet again as the RBI has raised repo rate by 140 basis points since May.

Share Market News Today Live: Sensex, Nifty extend fall ahead of RBI policy outcome; Asian Paints, Tata Motors among top drags

With a hike in repo rate, EMIs for home, car and personal loans are also likely to go up. Home, car and personal loans will also become more expensive as the cost of borrowing will rise for banks, leading to a rise in lending rates.