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Equity benchmark indices edged lower on Friday, dragged by losses in information technology and autos, as the RBI hiked repo rate by 50 basis points to fight inflation.
The NSE Nifty 50 index was down 0.3% at 16,776, while the S&P BSE Sensex fell 0.4% to 56,183.93 in early trade.
The Nifty IT index was down 1%, while the auto index dropped 0.8%.
The central bank's monetary policy committee (MPC) has already hiked the key policy rate by 140 bps since May to 5.4% to cool off domestic retail inflation that has stayed above the RBI's upper tolerance limit of 6% since January.
The benchmark indexes have fallen about 3% as of last close, since the RBI's decision in early August to raise the repo rate by 50 basis points.
"Falling commodity prices offer some relief, but we think tighter global financial conditions and high inflation will lead the MPC to stick to its front-loaded tightening cycle," economists at Barclays wrote in a pre-monetary policy note.
Investors also wait to hear from the RBI on how it plans to tackle the depreciating rupee after having spent massive amount of forex reserves to arrest the currency's fall against the strong US dollar.
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