Source Reuters
Mumbai, India — India’s benchmark equity indices recovered sharply on Friday after the Reserve Bank of India (RBI) announced a widely anticipated rate cut, helping the markets trim their weekly losses and stabilise following recent record highs.
The RBI’s Monetary Policy Committee (MPC) reduced the repo rate by 25 basis points, citing easing inflationary pressures and the need to support economic growth. This move — the first rate cut in several quarters — boosted investor sentiment across sectors, especially banking, real estate, and consumer-focused stocks.
Following the announcement, the BSE Sensex rebounded over 400 points intraday, while the NSE Nifty 50 climbed back above key support levels. Although both indices had been under pressure earlier in the week due to global market volatility and profit-booking, Friday’s rally helped them significantly pare their cumulative weekly losses.
Market analysts said the RBI’s decision provided a “relief rally” and improved the outlook for interest-rate-sensitive sectors.
“Lower borrowing costs are expected to revive credit demand, which is a positive signal for corporate earnings. Investors were quick to price in this optimism,” said a senior market strategist at a Mumbai-based brokerage.
Banking and financial services led the recovery, with major lenders registering healthy gains. Auto, realty, and FMCG stocks also contributed to the upward movement. However, IT stocks remained mixed due to global economic uncertainties.
Despite the late-week rebound, analysts cautioned that volatility may persist as global cues, including US economic data and geopolitical developments, continue to weigh on market sentiment.
Still, with the RBI turning slightly more accommodative and domestic economic fundamentals remaining resilient, investors expect the medium-term trajectory for Indian equities to remain positive.
The markets will reopen on Monday with participants watching closely for further cues on inflation trends, corporate earnings, and foreign institutional investor flows.
