The Indian stock market ended Friday on a strong note after the Reserve Bank of India (RBI) cut its key interest rate, boosting investor confidence. The BSE Sensex rose 447 points, while the Nifty 50 crossed the 26,150 mark, reflecting broad optimism across sectors.
The rally was mainly driven by banks, non-banking financial companies, auto makers, and real estate stocks and industries that benefit directly from lower borrowing costs. Top gainers included Bajaj Finserv, Bajaj Finance, and HCL Technologies, while Hindustan Unilever, Sun Pharma, and Tata Motors were among the top losers.
The positive sentiment began building even before the policy announcement and strengthened once the RBI confirmed a 25 basis-point cut in the repo rate, bringing it down to 5.25%. The central bank said this move aims to support economic growth at a time when inflation is easing and GDP performance remains solid.
In addition to reducing the policy rate, the RBI unveiled several liquidity-support measures. These include large open-market bond purchases and a dollar–rupee swap facility designed to ensure banks have adequate funds to lend. This further reassured the market that credit availability will improve in the coming months.
Market experts pointed out that while the rate cut is positive, deeper concerns continue to linger, such as weak nominal growth, a fragile rupee, and narrow market participation. Some sectors and stocks have been driving the bulk of gains, while broader market strength remains limited.
Global market trends, foreign fund flows, and currency movements will continue to play a significant role in determining whether the rally sustains. Any adverse global development or withdrawal of foreign investment may put pressure on domestic equities.
Still, the short-term outlook appears favourable. With borrowing expected to become cheaper, sectors linked to credit demand, like banks, real estate, automobiles, and consumer finance, are likely to benefit the most.
Also Read: Sensex 85,187, Nifty 26,021 open flat ahead of RBI policy