Benchmark indices experienced a notable increase in afternoon trading on Friday, following the Reserve Bank of India’s (RBI) announcement of a 25 basis point repo rate cut aimed at bolstering economic growth. As of 12:50 PM, the Sensex rose by 491.73 points, or 0.58 percent, reaching 85,757.05, while the Nifty gained 158.25 points, or 0.61 percent, to 26,192.00.
The RBI maintained a neutral stance, revising its inflation forecast for FY26 down to 2 percent from the previous 2.6 percent, and increased its growth projection to 7.3 percent from an earlier estimate of 6.8 percent. Additionally, the central bank announced open market operations worth ₹1 trillion and foreign exchange swaps of $5 billion to infuse liquidity into the financial system. Following this policy update, the yield on the 10-year government security decreased by 3 basis points to approximately 6.48 percent.
Among Nifty gainers, Shriram Finance led the pack, surging 3.11 percent to ₹853.90. It was followed by Bajaj Finserv, which advanced 2.70 percent to ₹2,104.50, and Bajaj Finance, which rose 2.60 percent to ₹1,055.90. Other notable gainers included Hindalco, up 2.21 percent at ₹828.70, and HCL Tech, which increased by 2.16 percent to ₹1,690.30. Conversely, Hindustan Unilever saw a decline of 3.59 percent to ₹2,335.10, while InterGlobe Aviation fell by 2.95 percent to ₹5,276.00. Trent was down 0.62 percent to ₹4,189.80, TVS Motor Company slipped 0.52 percent to ₹354.60, and Sun Pharma decreased by 0.51 percent to ₹1,809.00.
Naveen Kulkarni, Chief Investment Officer at Axis Securities PMS, remarked that the rate cut was widely anticipated, and that banks are likely to manage the impact on net interest margins, with a recovery in credit growth supported by enhanced consumption demand. Deepak Agrawal, Chief Investment Officer of Debt at Kotak Mahindra AMC, noted that the RBI capitalized on the policy flexibility provided by declining inflation and expects the central bank to pause any further rate actions.
Despite the upward movement in the indices, market breadth remained negative, with 1,667 stocks advancing compared to 2,267 declining on the BSE. Additionally, 76 stocks reached 52-week highs, whereas 230 touched 52-week lows. Sectoral indices displayed varied performance, with Nifty Financial Services increasing by 0.99 percent to 27,884.80 and Nifty Bank rising 0.71 percent to 59,711.80, while Nifty Smallcap 100 saw a decrease of 0.72 percent to 17,482.45.
Rahul Kalantri, Vice President of Commodities at Mehta Equities, indicated that the rupee is expected to exhibit volatility, with the USD/INR likely trading in a range between 89.40 and 90.95, as the liquidity injection generates a slight weakening trend for the domestic currency.
