Synopsis: The Indian stock market rebounded sharply on Friday after the RBI cut the repo rate by 25 bps to 5.25%. The move boosted rate-sensitive sectors, strengthened the rupee, and lifted overall market sentiment, marking a strong positive close for both Sensex and Nifty.
Sensex Jumps 447 Points, Nifty Reclaims 26,180 After RBI Cuts Repo Rate
The Indian stock market ended higher on Friday as the Reserve Bank of India (RBI) announced a 25 basis point cut in the policy repo rate, bringing it down to 5.25%. The monetary policy decision acted as the major trigger for the market’s sharp rebound.
At the closing bell, the BSE Sensex stood at 85,712.37, up 447.05 points (0.52%), while the NSE Nifty50 ended at 26,186.45, rising 152.7 points (0.59%).
Broader market performance remained mixed:
- Nifty Midcap100: +0.5%
- Nifty Smallcap100: -0.6%
This reflects selective buying interest across sectors.
Technical Indicators Show Renewed Strength
According to Sudeep Shah, Head – Technical & Derivatives Research, SBI Securities:
“Nifty moved higher through the day and ended with a sizable bullish candle. The index respected the 20-day EMA and closed above the upward trendline connecting the lows of 25,318 and 25,843. This reinforces the bullish undertone.”
RBI Revises Inflation & Growth Outlook
The Monetary Policy Committee (MPC), led by Sanjay Malhotra, announced:
- Inflation forecast for FY26 reduced from 2.6% to 2%
- GDP growth projection raised from 6.8% to 7.3%
These revisions boosted sentiment across rate-sensitive sectors such as banking, auto, and real estate.
Rupee Strengthens After Policy Decision
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, highlighted:
“The rupee strengthened to around ₹89.96 per USD as RBI’s policy moves improved currency sentiment. Buying interest picked up in financials as lower borrowing costs typically spur credit demand.”
He added that upcoming US CPI data and global rate expectations will guide near-term market direction.
Analysts Call It a ‘Surprise Positive Trigger’
Ajit Mishra, SVP – Research, Religare Broking, noted that the rate cut was the primary catalyst for the day’s rebound.
Vinod Nair, Head of Research at Geojit Financial Services, said:
“The RBI’s unexpected 25-bps rate cut, despite strong Q2 GDP numbers, coupled with lower inflation forecasts, has triggered strong risk-on sentiment across equities.”
📌 Key Takeaway
The RBI’s surprise rate cut has injected fresh optimism into the markets, strengthening the rupee, boosting financial stocks, and signaling a supportive monetary environment as India heads into 2026 with improved growth prospects.
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