Repo Rate Hike: Banking stocks may see sell-off if index stays under 42K

Descending Triangle breakdown on Nifty Bank index may see up to 5% decline

Reserve Bank of India (RBI) hiked repo rate by 25 basis points to 6.50 per cent on Wednesday, in a process to tame high inflation. It also projected a GDP growth to 6.40 per cent for the next fiscal. Earlier, RBI has raised repo rate by 35 basis points in December last year. 

Meanwhile, the banking index, Nifty Bank index has tumbled 3 per cent since December of last year, and barring HDFC Bank and IDFC First Bank, its other constituents have declined between 5 per cent to 8 per cent.

On Wednesday, Bandhan Bank became the top contender rising