Indian stock markets closed lower on Wednesday after the Reserve Bank of India's rate hike, with the Sensex falling 460 points to 72,599.05 and the Nifty declining 164.80 points to 22,610.85.

Rate-sensitive stocks led the fall as investors weighed the impact of higher borrowing costs. The RBI raised the repo rate by 25 basis points to 5.50 per cent and shifted its stance to "calibrated tightening", ruling out near-term rate cuts.

Analysts said banks could benefit from rising floating rates, which improve their lending margins. However, non-bank lenders may face pressure as their funding costs reprice faster than loan yields, especially for fixed-rate vehicle and microfinance loans.

Real estate and consumer companies could also see their earnings outlook affected by the RBI's inflation and growth assessment. The central bank projected GDP growth of 7.1 per cent for 2026-27 and inflation of 5.2 per cent. Brent crude hovered near $101.5 a barrel, adding to cost pressures across the economy.