The RBI may have increased interest rates and projected a lower GDP growth for this fiscal but the stock market rose as the monetary policy was in line with its expectations.
The BSE Sensex rose by 358.73 points as stocks of banks such as ICICI Bank, SBI and HDFC Bank shot up during the day.
The rupee gained 21 paise to close at Rs.61.31 versus the dollar.
Corporate India was, however, not enthused by the hike in rates. “The rise in repo rate has come as a disappointment to industry especially as the investment climate continues to be weak and growth outlook remains muted as a high interest rate regime deters consumption and investment demand,” Confederation of Indian Industry Director-General Chandrajit Banerjee said.