Shares of car companies and banks were either steady or climbing after the Reserve Bank of India raised the repo rate (the rate the RBI lends to banks) by 50 basis points to 5.40%.

The policy rate was the highest since August 2019.

ICICI Bank was up 1.5%, IDFC First Bank was up 1.4%, SBI was up 1%, and Axis Bank was up 0.78%. Nifty Bank rose 0.72%.

Nifty Auto fell slightly, mainly due to sales at auto parts makers Balkrishna Industries and Sona Comstar. TVS Motor, M&M, Escorts and Bharat Forge trade in the green.

Nifty Realty, which is also rate-sensitive, rose 0.41%. Shares in Macrotech Developers, Sobha, DLF, Godrej Properties and Oberoi Realty rose 1.5%.

Anuj Puri, chairman of the ANAROCK Group, said: “A 50bps rate hike is definitely on the high side, and housing loan rates will move further into the red zone”. “The blow is accompanied by inflationary trends in key raw materials, including cement, steel, labour, etc., which have recently increased property prices. These factors combined have impacted residential sales.”

This suggests investors are shrugging off rising interest rates, even though it would lead to higher loan EMIs as Sensex and Nifty maintained their early gains. The Sensex rose 0.36% to 58,508, while the Nifty gained 0.34% to 17,440