The stock markets settled lower on Wednesday after two consecutive sessions of gains, as the RBI raised the key policy rate for the first time in nearly four years.
The Sensex fell 429.11 points, or 0.59 per cent, to settle at 72,638.70. During the day, it dropped 599.09 points, or 0.81 per cent, to hit a low of 72,468.72.
The Nifty declined 173.05 points, or 0.76 per cent, to end at 22,603.05.
The RBI shifted its monetary policy stance from neutral to "calibrated tightening", a move economists interpreted as a strong signal that the central bank's focus had shifted towards containing inflation and that the possibility of rate cuts had been ruled out for the foreseeable future.
"Rate cuts are off the table in the near term and policy action ahead can only be a rate hike or a pause, depending on the evolving conditions and the outlook," Malhotra said while announcing the MPC decisions.