Mumbai, Dec 5: Stock market benchmark indices Sensex and Nifty rallied on Friday after the Reserve Bank of India (RBI) cut key benchmark interest rate for the first time in six months and took steps to boost liquidity to support a “goldilocks” economy in the face of high US tariffs.
Rising for the second day in a row, the 30-share BSE Sensex advanced 447.05 points, or 0.52 per cent, to settle at 85,712.37. During the day, it jumped 531.4 points, or 0.62 per cent, to 85,796.72.
The 50-share NSE Nifty climbed 152.70 points, or 0.59 per cent, to 26,186.45.
On the weekly front, the BSE benchmark eked out a marginal gain of 5.7 points, while the Nifty dipped 16.5 points.
The six-member monetary policy committee, led by RBI Governor Sanjay Malhotra, voted unanimously to lower the repurchase or repo rate by 25 basis points to 5.25 per cent and retained a neutral stance, which gives room for further rate cuts.
In doing so, the RBI seems to have shrugged off concerns over fall in the rupee, which breached 90 to a dollar this week.
The RBI lowered its inflation forecast for the fiscal year through March to 2 per cent from 2.6 per cent, while raising its GDP growth projection to 7.3 per cent, from the previous estimate of 6.8 per cent.
From the Sensex firms, State Bank of India, Bajaj Finserv, Bajaj Finance, Maruti, HCL Tech, Larsen & Toubro, Mahindra & Mahindra and Infosys were among the major winners.
However, Hindustan Unilever, Eternal, Tata Motors Passenger Vehicles, and Sun Pharma were among the laggards.
Rate-sensitive stocks — bank, auto and realty — ended higher.
“Equity markets moved higher as investor sentiment received a major boost after the Reserve Bank of India (RBI) cut the repo rate by 25 bps and upwardly revised its FY26 GDP forecast to 7.3 per cent from 6.8 per cent, easing concerns over tariff-related pressure on domestic growth,” Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.
The BSE midcap gauge climbed 0.21 per cent, while smallcap index declined 0.67 per cent.
Among sectoral indices, BSE Focused IT jumped 0.90 per cent, bankex (0.86 per cent), financial services (0.84 per cent), metal (0.74 per cent) and teck (0.73 per cent).
However, BSE Services, capital goods, industrials and FMCG were the laggards.
“Indian markets have enthusiastically responded to the RBI’s unexpected 25 bps rate cut, a move that seemed unlikely given the strong Q2 GDP data. This surprise, combined with sharply lower inflation forecasts and supportive liquidity measures, has triggered a risk-on sentiment across equities. Rate-sensitive sectors such as autos, real estate, and NBFCs are leading the gains due to reduction in cost,” Vinod Nair, Head of Research, Geojit Investments Ltd, said.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,944.19 crore on Thursday, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 3,661.05 crore, according to exchange data.
In Asian markets, South Korea’s Kospi, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index settled in positive territory while Japan’s Nikkei 225 index ended lower.
Markets in Europe were trading higher. US markets ended on a flat note on Thursday.
Brent crude, the global oil benchmark, climbed 0.16 per cent to USD 63.36 per barrel.
On Thursday, the Sensex edged higher by 158.51 points, or 0.19 per cent, to settle at 85,265.32. The Nifty climbed 47.75 points, or 0.18 per cent, to 26,033.75. (PTI)
