RBI signals more rate hikes ahead: Could 7.25% yield level become a near-term market reference point?

The RBI raised the repo rate by 25 basis points to 5.50 percent on October 7 and shifted stance to calibrated tightening, with Governor Sanjay Malhotra indicating further hikes or a hold remain possible while rate cuts are off the table. The Sensex and Nifty 50 ended 0.59 percent and 0.76 percent lower respectively, while the benchmark 10-year bond yield rose to 7.24 percent from 7.20 percent. Elevated oil prices, weak monsoon, rising global yields and fiscal deficit concerns are driving yields higher, with experts flagging 7.25 percent as a near-term psychological reference point for the 10-year G-sec.