Banking and real estate stocks are likely to come under selling pressure on Monday

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as a result of the Reserve Bank of India (RBI) increasing two key policy rates on Friday. But experts feel that the central bank’s move, which was expected, will have only a marginal impact on the broader market.

The RBI raised the rates at which it lends to and borrows from banks by 25 basis points each to

5 per cent and 3.5 per cent, respectively, after the markets closed on Friday.

“The rate hike will have a marginal impact. It had to happen,” said Motilal Oswal, chairman and managing director of Mumbai-based Motilal Oswal Financial Services.

Agreed Ambareesh Baliga, vice president at Karvy Stock Broking. “The rate hike won’t impact the market much as institutional inflows are strong.”

Foreign institutional investors have net bought Indian shares worth $3.23 billion this month so far, data available on the Sebi website showed.

Experts believe that interest rate sensitive scrips may face some heat.

“Banking and real estate stocks may take a beating on Monday,” said Mayank Shah, chief executive officer at Anagram Capital.

The negative sentiment due to RBI’s rate hike reflected in the performance of American Depository Receipts (ADRs) of Indian companies on Friday, which lost between 1-4 per cent. ICICI Bank ADR fell the most, down 3.84 per cent at $40.77. The Sensex has gained more than 8 per cent since the budget announcement on February 26. It closed at 17,578.23 on Friday, up 0.34 per cent, or 58.97 points.