RBI announces rate hikes ,Target Reduce-Inflation

The Reserve Bank of India(RBI) hiked repo rates by 50 bps and CRR by 25 bps on July 29.
The repo rate is at 9% for the first time since October, 2000, while CRR is at 9% for the first time since November, 1999.CRR hike is effective from Aug 30.
RBI governor Y.V.Reddy said, inflation is the biggest risk now and stong measures are needed to contain it.
RBI is aiming to bring down inflation to 5% as soon as possible. RBI claims it's possible to lower inflation to 7% by March '09.

Some bankers are shocked and some expect positive effect.

The sectors going to be affected immediately are Auto space,real estate sector, Banking/lending agencies/financial services.EPS targets of comanies will be reduced.
No upside target can be fixed now for the stock markets unless major news triggers.
The home and auto buyers are going to pay more if they take loans from banks.
clearly,growth is going to be affected across all sectors.
RBI governor also warned some private banks of extended credit and non provisioning for bad debts.