The Australian Reserve Bank raised interest rates by 0.25% for the second time in as many months. It's been interesting to watch the stock market's financial sector over this time.
The first raise caused many Australian bank stocks to decrease in value as (according to analysts) people thought the raise would slow down the high amount of loans being made in Australia at the moment due to the increased property market. I only read one article where an analyst actually pointed out that banks make more money in an increased interest rate environment than a low one.
The second raise actually caused the bank stocks to rally as (again according to analysts) people thought it would be the last raise till February next year and had hopes the lending spree would continue. Some bank stocks rose over a dollar in a single days trading!
To quote Warren Buffet - "No one knows exactly what the market will do" :)