RBI policy review effects repo rate hike, bank share prices fall, SBI, Bank of Baroda hit

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Bank shares down 0.8 percent after the RBI at its policy review unexpectedly raised repo rate on Tuesday by 25 basis points. Reuters Bank shares down 0.8 percent after the RBI at its policy review unexpectedly raised repo rate on Tuesday by 25 basis points. Reuters
SummaryRBI policy review that led to repo rate hike caused SBI, Bank of Baroda share prices to sink.

Bank shares in India are down 0.8 percent after the RBI unexpectedly raised its repo rate on Tuesday by 25 basis points. The banking index fell as much as 2 percent after the rate hike but retraced losses as the RBI's statement was seen as more dovish.

RBI policy review: 'Worried' Raghuram Rajan pulls surprise, raises repo rate 25 bps, leaves CRR unchanged

The RBI eased the sting from the rate hike by saying it was willing to become more accommodative should inflation ease faster than it currently anticipated, traders say.

State Bank of India (SBI) is up 0.4 percent after earlier falling as much as 1 percent, while Bank of Baroda is up 1 percent after dropping up to 1.4 percent.

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