After the RBI monetary policy outcome, Indian equity markets indexes which were trading range-bound for most of the early session fell sharply.

Sensex was down about 200 points at 11 am while Nifty and Bank Nifty dropped over 0.30 and 0.20 percent respectively after the RBI Policy was announced

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The RBI on 7 Dec, raised the key repo rate by 35 basis points (bps) as widely expected, the fifth straight increase Since April 2022

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The RBI also said that its battle against inflation was not over yet though it kept the inflation forecast steady at 6.7% for the financial year 2022/23

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Markets fell as RBI has cut the GDP growth forecast for FY23 to 6.8 percent from 7 percent.

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The central bank raised the repo rate by 35 basis points, which is in line with expectations, but the tone of the governor was hawkish

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The market was expecting the governor to signal that the rate hike cycle is coming to an end, but this policy shows no signs of it.

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Economists expect another hike by RBI in the current cycle in the next RBI MPC meeting on 6-8 Feb 2023

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