How will RBI's rate hike affect bonds and debt funds?

RBI's 25-bps repo rate hike to 5.5% and hawkish stance are expected to keep bond yields elevated. It could also create short-term mark-to-market pressure for debt funds, particularly longer-duration funds. Experts advise investors to avoid locking into long tenures, stick to short- to medium-duration strategies and gradually increase duration if yields move up further.