CHENNAI: Indian equity markets opened on a strong note Friday, buoyed by the Reserve Bank of India's unexpected 50 basis point repo rate cut, which lifted investor sentiment and sparked a broad-based rally from early lows.
The BSE Sensex rose 96 points or 0.12% to 81,538, recovering nearly 350 points from the day's intraday low. Similarly, the NSE Nifty50 gained 29 points or 0.12%, trading at 24,780, as markets welcomed the central bank's proactive move to support growth.
Market Highlights
The RBI cut the repo rate to 5.50%, exceeding market expectations. Governor Sanjay Malhotra noted that inflation management remains a challenge, and the move aims to balance growth concerns with price stability.
The decision comes amid muted domestic demand and rising global uncertainty, with the RBI focused on cushioning the economy against external shocks such as volatile crude oil prices and global bond market volatility.
Sectoral Trends
Top gainers among the sectoral indices in the morning trade included Nifty Metal and Nifty Realty, each advancing around 0.6%, supported by expectations of lower borrowing costs and infrastructure push.
While the lagging sectors were Nifty Auto and Nifty Financial Services were slightly in the red, down up to 0.23%, reflecting selective profit-booking after recent gains.
Broader Markets
The Nifty MidCap and Nifty SmallCap indices traded flat with a positive bias, each up about 0.3%, showing resilience among retail and domestic-oriented stocks.
Global & Domestic Context
Global equity cues remained mixed, with investor concerns lingering over US tariffs and rising global bond yields. Asian markets traded cautiously.
However, on the domestic front, the RBI’s larger-than-expected rate cut could encourage faster monetary transmission, lower borrowing costs, and boost credit demand. However, analysts caution that persistent inflationary risks and global volatility remain key watchpoints.
Outlook
According to analysts, with the RBI delivering a dovish surprise, markets may see renewed momentum in rate-sensitive sectors like real estate, infrastructure, and capital goods. Investors will closely watch commentary on future rate direction, transmission effectiveness, and evolving global conditions.
Disclaimer: This report is for informational purposes only. Investors should consult certified financial advisors and refer to official RBI and exchange releases for complete insights for investment decisions.