AMN / BIZ DESK
Indian equity markets staged a strong recovery on Wednesday, snapping an eight-day losing streak, after the Reserve Bank of India (RBI) maintained its repo rate at 5.5% and retained a neutral policy stance. The decision, widely anticipated by market participants, provided a boost to investor sentiment, especially in rate-sensitive sectors.
The benchmark BSE Sensex surged 715.69 points, or 0.89%, to close at 80,983.31, while the NSE Nifty 50 climbed 225.20 points, or 0.92%, to settle at 24,836.30. The rally was broad-based, though banking, financial services, and auto stocks led the charge.
The RBI’s Monetary Policy Committee (MPC) unanimously voted to keep rates unchanged, citing stable inflation and stronger-than-expected economic growth. The central bank revised its FY26 GDP growth forecast upward to 6.8% from 6.5%, while lowering inflation expectations to 2.6% from 3.1%.
Sectoral Performance
- Banking & Financials: Rate-sensitive stocks reacted positively. Nifty Bank rose 0.7%, Nifty Financial Services gained 0.75%, and Nifty Private Bank added 0.8%. ICICI Bank (+1.63%) and Kotak Mahindra Bank (+1.59%) were top gainers. However, PSU banks underperformed, with IDFC First Bank (-1.7%) and Canara Bank (-1.1%) among the laggards.
- Auto: Nifty Auto advanced 0.5%, driven by strong gains in Tata Motors (+3%) and Mahindra & Mahindra (+2%). Other notable performers included Exide Industries, Eicher Motors, and TVS Motor.
- Realty: Nifty Realty added 0.4%, supported by expectations of stable interest rates aiding housing demand.
- Pharma: The sector saw modest gains, with defensive buying amid global uncertainty.
- Midcap & Smallcap: Broader indices underperformed slightly, with Nifty Midcap and Smallcap rising just 0.08% and 0.15%, respectively.
Despite the rally, market breadth remained mixed, with select pockets of weakness in PSU banks and consumer durables. Foreign Institutional Investors (FIIs) continued their selling streak, but strong Domestic Institutional Investor (DII) inflows helped cushion the downside.
With markets closed tomorrow for Gandhi Jayanti and Dussehra, investors will look to global cues and corporate earnings for direction when trading resumes on Friday.
The RBI’s cautious optimism and policy continuity have provided a stabilizing anchor for equities ahead of the festive season, with financials and autos poised to benefit from improving sentiment and demand.