"In a surprise meeting today, RBI announced a repo rate hike by 40bps (to 4.4%) and an increase in the CRR rate by 50bps. RBI is no longer behind the curve to react to rising inflation numbers. In terms of timing, it took everyone by surprise and the hike of 40bps is higher than the market expectation of 25bps in the June Meet. This apart, the increase in CRR by 50bps will withdraw Rs 87,000cr liquidity in the system. Immediately on the announcement, all interest-rate sensitive stocks fell sharply including Banks, Auto, Real estate, etc. Coming ahead of the US Fed announcement due today, the RBI has taken the lead for the time being after being blamed for being behind the curve by some economists. Nifty could remain under pressure for some time."