Nifty 50 and RBI MPC rate hikes: Does a rising interest rate always trigger a market correction? What history suggests

What happened: The RBI MPC unanimously raised the repo rate by 25 basis points to 5.5% from 5.25%, its first hike in four years, and changed its stance to calibrated tightening. The Sensex fell as much as 599 points and the Nifty 50 declined 230 points. Key numbers: Repo rate up 25 bps to 5.5%. Why it matters: The article says rate hikes are usually seen as negative for equities, but history shows the Nifty's response varied with the reason for tightening, growth, earnings and the global backdrop. Governor Sanjay Malhotra indicated rate cuts were unlikely in the near term.

The RBI MPC unanimously raised the repo rate by 25 basis points to 5.5% from 5.25%, its first hike in four years, and changed its stance to calibrated tightening. The Sensex fell as much as 599 points and the Nifty 50 declined 230 points.

The article says rate hikes are usually seen as negative for equities, but history shows the Nifty's response varied with the reason for tightening, growth, earnings and the global backdrop. Governor Sanjay Malhotra indicated rate cuts were unlikely in the near term.