MUMBAI — Indian stock markets ended higher on Friday after the Reserve Bank of India cut the repo rate by 25 basis points to 5.25 percent.
The Monetary Policy Committee, led by Governor Sanjay Malhotra, also retained a neutral policy stance.
Alongside the rate cut, the RBI sharply reduced its inflation forecast for FY26 to 2 percent from 2.6 percent and raised its growth projection to 7.3 percent from the earlier 6.8 percent.
Following the announcement, the Sensex closed at 85,712.37, up 447.05 points or 0.52 percent.
The Nifty also finished higher at 26,186.45, gaining 152.7 points or 0.59 percent. Analysts noted that the Nifty closed near 26,200, firmly holding above the key 26,000 psychological level.
“Strong support remains intact in the 26,000–26,100 band, which continues to act as the immediate demand base,” they said.
“A sustained closing above 26,300 is required to unlock the next upside leg towards 26,450–26,600,” market watchers added.
In the broader market, the Nifty MidCap index rose 0.49 percent, while the Nifty SmallCap index slipped 0.57 percent.
Most major sectoral indices closed in the green. Nifty PSU Bank was the strongest performer with a 1.5 percent gain.
Banking, auto, IT, metal, realty, oil and gas, and chemical stocks also advanced, while media, pharma, consumer durables and FMCG indices ended lower.
On the Sensex, State Bank of India, Bajaj Finserv, Maruti Suzuki, Bajaj Finance and HCL Tech were the top gainers.
Hindustan Unilever, Eternal, Trent, Sun Pharma, Tata Motors PV and Bharat Electronics were among the major losers.
Analysts said Indian markets have reacted positively to the RBI’s unexpected 25-bps rate cut, a move that appeared unlikely given the strong Q2 GDP numbers.
“This surprise, combined with sharply lower inflation forecasts and supportive liquidity measures, has triggered a risk-on sentiment across equities,” market experts said. (Source: IANS)
