Governor Sanjay Malhotra-led RBI Monetary Policy Committee (MPC) announced to keep the repo rates unchanged at 5.5 per cent. Following the announcement, the BSE Sensex fell around 165 points to day’ low of 80,544.95 levels, while the Nifty50 was down 70 points to day’s low of 24,579.7 levels.
The Reserve Bank of India’s MPC voted unanimously to keep the benchmark policy rate unchanged and maintain the monetary policy stance at ‘Neutral’, RBI Governor Sanjay Malhotra said in the post-policy address. The decision was widely in line with market expectations, following a 50 basis point rate cut in the previous meeting, which had taken many by surprise.
Governor Malhotra reiterated that the shift to a ‘neutral’ stance reflects the central bank’s flexibility to act in either direction based on incoming data. He noted that while the domestic economy is largely tracking the RBI’s assessment, some high-frequency indicators in May and June have shown mixed trends. Despite the short-term variability, Malhotra expressed confidence in India’s economic trajectory. “Over the medium term, the Indian economy holds bright prospects in the changing world order, drawing on its inherent strength, robust fundamentals and comfortable buffers,” he said.
The RBI Governor stated that retail inflation is expected to rise in the final quarter of FY2026, aligning with analyst forecasts. However, core inflation is projected to remain stable around the 4 percent mark. Reflecting signs of easing price pressures, the RBI has revised its Consumer Price Index (CPI) inflation projections downward for most of FY26. The headline inflation estimate for the full fiscal year has been cut to 3.1 percent from the earlier 3.7 percent. RBI also retained its real GDP growth forecast for the current financial year at 6.5 percent.
Broader markets underperformed benchmark indices with the Nifty Midcap and Nifty Smallcap indices down over ap ercent each.
Among stocks, Trent, Asian Paints, Adani Ports, Kotak Bank and Coal India were among the top gainers on the Nifty, while Eternal, Infosys, Wipro, Dr Reddy’s, and Cipla were among the top laggards.
Rate-sensitive sectors
Rate sensitive sectors were mixed post the RBI announcement with the Nifty Bank and Nifty Financial Services trading flat while Nifty Auto and Nifty Realty down 0.65 percent and 1.75 percent.
In the Nifty Bank index, Kotak Bank, ICICI Bank, SBI, Bank of Baroda and HDFC Bank were in the green while the remaining constituents were negative. IndusInd Bank fell the most, down 1 percent followed by IDFC First Bank and AU Small Finance Bank.
Meanwhile, in the Auto index, Bosch was the top dragger, down 4.6 percent followed by Balkrishna Industries, down over 3 percent and Motherson down over 1 percent. Hero Moto, Exide Industries, TI India, TVS Motor, and Bharat Forge also shed over half a percent each. However, Maruti and Eicher Motors were in the green.
Finally in the Realty segment, all constituents were in the red. Prestige was the top loser, down 2.5 percent followed by Phoenix, DLF, Lodha, Anant Raj, Brigade, and Godrej Properties, down over 1 percent each.
Among other sectors, Nifty IT and Nifty Pharma lost over 1 percent each while Nifty FMCG and Nifty Metal shed around 0.4 percent each.
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