After a period of volatility, optimism returned to the Indian stock market, boosted by the RBI’s repo rate cut, which triggered a sharp rally in rate-sensitive stocks and helped key indices close above important levels.
The Nifty 50 gained 0.59%, closing above the 26,000 mark at 26,186, while the S&P BSE Sensex surged 0.52% to 85,712. The broader markets, however, were mixed, with the Nifty Midcap 100 index rising 0.53% and the Nifty Smallcap 100 index falling 0.54%.
Sector-wise, all major indices closed higher, led by the Nifty PSU Bank, which rebounded sharply by 1.55%, followed by Nifty IT, Nifty Metal, and Nifty Auto, each rallying between 0.66% and 1%. The Nifty Realty and Nifty Chemicals indices also closed higher, gaining 0.38% and 0.20%, respectively.
The Reserve Bank of India (RBI) cut the benchmark repo rate—the rate at which it lends to commercial banks—by 25 basis points to 5.25% for the first time in six months and left room for further easing, predicting that inflation will remain relatively low even as the economy continues to expand.
Some analysts had expected the RBI to hold rates steady, given that it had already cut rates by more than 100 basis points this year and that economic growth hit a six-quarter high in July-September, alongside the rupee’s plunge to a record low this week.
However, a majority argued that easing price pressures and mounting risks to India’s economic outlook stemming from Trump’s tariffs justified a reduction. The currency is down almost 5% against the dollar this year, the worst performer in Asia, largely due to the slump in exports following US President Donald Trump’s imposition of 50% tariffs on Indian goods.
Banks and NBFCs lead rally
Banks and NBFCs led the rally today, with Mahindra & Mahindra Financial Services, Sundaram Finance, Shriram Finance, Cholamandalam Investment & Finance Company, Muthoot Finance, L&T Finance, Aditya Birla Capital, RBL Bank, Manappuram Finance, PNB Housing Finance, State Bank of India, and Bajaj Finserv all rallying between 6% and 2.4%.
After remaining under sharp selling pressure, Patanjali Foods shares made a comeback, recovering 4% to ₹547.80 apiece.
Meanwhile, PTC Industries shares rose 4% to ₹18,854 apiece after the company’s subsidiary, Aerolloy Technologies, signed a long-term supply agreement with Honeywell Aerospace Technologies.
Extending its winning run to the third straight session, Himadri Speciality gained another 2% to ₹471.40 apiece, while Wockhardt resumed its recent winning streak, surging 2% to ₹1,360 apiece.
Multi Commodity Exchange also made a strong recovery, with the stock rising 2.2% to Rs10,343 apiece. Auto stocks, which are expected to benefit from low interest rates, also closed with healthy gains.
After a seven-day decline, buyers finally returned to Suzlon Energy, lifting the stock by 1.75%, although it remains down 4.20% for the month and 17% year-to-date.
