The Streak Ended by 98 Points: What the RBI’s First Rate Rise Since 2023 Changes for You, and What It Doesn’t

For eight weeks in a row the Nifty 50 closed lower than it had the week before. Last week we reported that this was its longest such run in 25 years. This week the run ended. The Nifty closed on Friday 9 October at 22,520.45, up 98.50 points, or 0.44%, on the week. The Sensex rose 562.63 points, or 0.78%, to 72,472.33.

In the same week the Reserve Bank of India raised its policy interest rate for the first time since February 2023. So there are two pieces of news, and it is worth being clear about what each one does and does not mean for an ordinary investor.

First, the streak: it ended by one Friday

Here is how the week went on the Nifty. Monday rose 133.80 points and Tuesday 220.35, as Indian markets caught up with a weak American jobs report and lower oil prices they had missed over the long weekend. On Wednesday the RBI announced its decision and the index fell 173.05 points. On Thursday it fell another 371.25 points, or 1.64%, and the Sensex lost 1,045.46 — reported as the largest one-day fall in about three months. Oil had risen above $105 a barrel, and foreign investors sold a net ₹12,944 crore of Indian shares in that single session on provisional exchange data.

At Thursday’s close the Nifty stood at 22,231.80. That was lower than where it had finished the previous week, and 9.52% below its 7 August close. A ninth down week was one ordinary Friday away.

Then on Thursday evening TCS reported its quarterly results, and President Trump said the United States would not attack Iran before the American elections on 3 November. On Friday the Nifty rose 288.65 points, or 1.30%, and the week finished 98.50 points higher.

For the past two weeks we have argued that a losing streak is a count, and that what your money experiences is a size. It would be inconsistent to treat the end of the streak differently. If TCS had reported a day later, the headlines this weekend would be about nine weeks, and nothing in your portfolio would be any different. The size is what matters, and the size is this: the Nifty is 8.34% below its 7 August close. A week ago that figure was 8.74%. This week returned 98.50 of the 2,148.70 points lost over the previous eight.

The streak is over. The fall is, so far, almost entirely intact. Both statements are true, and only the second one is about your money.

Second, the rate rise: what the RBI did

On Wednesday 7 October the Monetary Policy Committee voted unanimously to raise the repo rate by 25 basis points, from 5.25% to 5.50%. A basis point is one hundredth of a percentage point, so this is a rise of a quarter of one per cent. The committee also changed its stance from neutral to what it calls calibrated tightening, by four votes to two. Governor Sanjay Malhotra said the next policy move can only be a rate hike or a pause.

The reason is inflation. Retail inflation was 4.82% in August, its tenth consecutive monthly rise, and the RBI now projects 5.2% for the financial year, with 6.0% in the October–December quarter. Oil above $100 a barrel and a weaker rupee both push prices up. The RBI also projects the economy to grow 7.1% this year, so this is a central bank acting on prices, not one reacting to a weak economy.

What the rate rise touches: your home loan

Most floating-rate home loans taken in recent years are linked to the repo rate and reset within about three months. When the rate goes up, lenders usually keep your EMI the same and extend the number of months you pay, unless you ask otherwise or the tenure limit is reached. That is convenient, and it can be expensive: on a long loan, a few extra years of payments cost much more than a slightly higher EMI would have.

It is worth one call or one login to your lender to find out which has happened to your loan and what the new tenure is. If you can afford a somewhat higher EMI, ask what it would take to keep the original end date.

What it touches: fixed deposits

Rates on new fixed deposits tend to follow the policy rate upward, usually more slowly than loan rates do. Existing deposits keep the rate they were booked at. If you have a deposit maturing in the next few months, you will probably be offered a little more than before. There is no need to break an existing deposit; check the penalty first if you are tempted.

What it touches: debt funds

This is the part many investors find confusing, so here it is plainly. A debt fund holds bonds. When interest rates rise, existing bonds, which pay the older, lower rate, are worth a little less, and the fund’s NAV is marked down. The longer the maturity of the bonds a fund holds, the larger that mark-down. India’s 10-year government bond yield rose to about 7.23% this week, reported as a two-year high.

The other half of the story is that the fund now earns the higher rate on everything it buys from here. So a fund holding short-maturity paper is affected least and benefits soonest, and a fund holding long-maturity bonds is marked down more now and takes longer to earn it back.

None of this is a judgement on any particular scheme. The practical question is whether each debt fund you hold matches the date you need the money. If the goal is many years away, a mark-down this month matters little. If the goal is next year, it matters more. Your Relationship Manager can tell you the duration of each debt fund you hold.

What it does not touch: your equity SIP

A rate decision changes nothing about your SIP instalment, its date, or the units you already own. Share prices do react to interest rates, but look at what actually happened this week. The market fell 0.76% on the day of the decision. It fell 1.64% the next day, when oil rose and foreign selling was at its heaviest. It rose 1.30% the day after that. The interest rate was exactly the same on all three days.

It also did not, in its first week, steady the rupee. The rupee closed on Thursday at 96.88 to the dollar, close to its record low, and ended the week at 96.71, weaker than the week before. The RBI’s foreign exchange reserves fell by $12.95 billion to $734.61 billion in the latest reported week, a fourth straight weekly fall. A policy rate is one influence among several, and this week oil and foreign selling were stronger ones.

Who was selling and who was buying

Foreign investors sold a net ₹30,294 crore of Indian shares over the five sessions. Domestic institutions, of which mutual funds are the largest part, bought a net ₹30,313 crore. The two figures differ by about ₹19 crore. On Thursday, the day the Sensex fell more than a thousand points, domestic institutions bought ₹10,703 crore.

So foreign selling did not stop in the week the index rose. It was met. A large part of the money that met it is the monthly SIP instalments of ordinary investors, collected and invested by fund managers whatever the headlines say.

One thing we cannot tell you this week is what AMFI’s September figures showed. We said last week they were due around the 10th. At the time of writing we could not find and verify them, and we would sooner say so than print a number we have not checked. We will report them next week.

What we still do not know

Last week we wrote that nobody knows whether there will be a ninth week. There was not one. That does not mean we know what the tenth week holds. Oil is higher than it was a week ago. The Strait of Hormuz has not reopened; what changed is that a date for possible military action was taken off the table. The RBI has said plainly that rates will either rise again or stay where they are. September’s inflation figure arrives on Monday 12 October.

What this week does show is how quickly direction can change without notice: 371 points down and 289 points up on consecutive days. Anyone who sold on Thursday afternoon missed Friday. Anyone who buys in a hurry because of Friday is making the same kind of decision in the other direction. A plan that depends on being present for the right day is not really a plan.

Three things worth doing this week

One: find out how your home loan is absorbing the rate rise, EMI or tenure, and decide which you prefer.

Two: for each debt fund you hold, compare its duration with the date of the goal it is meant for. Ask your Relationship Manager if you are not sure of either.

Three: treat the up week exactly as you treated the down weeks. If you kept your SIP running through eight falls, keep it running through one rise. The instalment, the date and the goal are the plan.

If you would like to go through what the rate rise changes for your own loans, deposits and funds, speak to your Relationship Manager. It is usually a short conversation.

Trustner Asset Services Pvt. Ltd. is an AMFI-registered Mutual Fund Distributor (ARN-286886) and earns commission on Regular plans; it is not a SEBI-registered investment adviser. This article is for general information and education and does not constitute investment advice. Mutual fund investments are subject to market risks; read all scheme-related documents carefully. Past performance is not indicative of future results. Company names are mentioned for illustration only and are not a recommendation. Market figures are from public exchange data and news agencies as of 9 October 2026 and may be revised.