RBI Monetary Policy: The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) unanimously cut the repo rate by 25 basis points to 5.25%, while retaining its neutral stance. On Friday, December 5, Governor Sanjay Malhotra announced the move, calling attention to record-low inflation. He noted inflation at a benign 2.2% and growth at 8% for the first half of the year, describing the moment as a rare “Goldilocks” phase. RBI also raised its FY26 GDP growth estimate to 7.3% from 6.8% and lowered the FY26 CPI inflation projection to 2% from 2.6%.
The cut surprised many, as most experts expected the central bank to hold rates in December. Nine of 13 economists polled by Mint anticipated a pause, while four expected a 25-basis-point reduction. In October, the MPC kept the repo rate unchanged at 5.50%, raised FY26 growth estimates to 6.8%, and cut inflation forecasts to 2.6%.
Following the policy announcement, Indian stock markets, which opened on a flat note on Friday, extended their upward momentum. The Sensex gained 257.68 points, or 0.3 per cent, to reach the day’s high of 85,522.97. Meanwhile, the Nifty 50 rose 80 points, or 0.3 per cent, to 26,113.85. Broader market indices, including midcap and smallcap stocks, underperformed the benchmarks, dropping 0.5 percent and 0.9 percent, respectively.
Rate-Sensitive Sectors and Stocks
Rate-sensitive sectors reacted sharply to the RBI’s repo rate cut. After opening on a weak note, Nifty Bank reversed losses and climbed 0.65% in intra-day trade, while Nifty Auto gained 0.4% and Nifty Realty advanced 1.5%. Nifty Financial rose 0.7%, supported by buying interest across lenders, with Nifty PSU Bank up 1.2% and Nifty Private Bank higher by 0.7%.Markets, Rate sensitive sectors, Nifty today, Nifty50, sensex today, Nifty auto, Nifty private bank, Nifty PSU Bank, Nifty Realty
Banks and Financial Services Shine
Within the Nifty Bank index, most stocks traded positively. Punjab National Bank led the gains, rising over 1%, followed by AU Small Finance Bank, IDFC First Bank, SBI and Canara Bank, which added more than 0.5% each. Federal Bank, IndusInd Bank and Axis Bank were the only three stocks in the red.
In the financial services space, SBI Cards, Bajaj Finance and Shriram Finance led the rally with a 2% increase each. Bajaj Finserv and SBI Life followed closely, both rising over 1%.
MCX, Chola, Muthoot and ICICI Pru also rose over 0.5%. However, HDFC AMC, LIC Housing, REC and HDFC Life fell between 0.5–1% each.
Strong Performance By Auto & Realty Sectors
While the Auto sector rose, its constituents were mixed. Maruti and Eicher advanced around 1%, while Bosch, M&M and TVS Motor gained about 0.5%. However, Apollo Tyres shed 1%, and Exide, Balkrishna and Tata Motors fell over 0.5% each.
In the realty sector, Prestige Estates emerged as the top gainer, rising over 1.5%, while Signature Global and Oberoi Realty also gained more than 1%. Meanwhile, DLF and Lodha added over 0.5% each. However, Anant Raj fell over 1%, and Brigade and Phoenix were also in the red.
