Mumbai (Maharashtra) [India], February 7 : The Indian stock market ended in the red on Friday following the Reserve Bank of India's (RBI) announcement of a 25 basis points (bps) cut in the repo rate, bringing it down to 6.25 per cent.
This marked the first rate reduction in over five years, signalling an effort to boost economic growth amid global uncertainties.
The BSE Sensex declined by 197.97 points, closing at 77,860.19, while the NSE Nifty lost 43.40 points, ending the session at 23,559.95. Out of the Nifty 50 stocks, 28 advanced while 23 declined.
Among the top gainers in the Nifty index were Tata Steel, ITC Hotels, Bharti Airtel, JSW Steel, and Trent, while ITC, SBI, Britannia, Adani Ports, and TCS were among the biggest losers.
Commenting on the market reaction, VLA Ambala, SEBI Registered Research Analyst and Co-Founder of Stock Market Today, stated, "On Friday, the Monetary Policy Committee of the RBI reduced the repo rate to 6.25 per cent for the first time in over five years. This measure indicates a strategic move to stimulate economic growth amid a challenging global backdrop."
She added, "This decision is expected to benefit several sectors, particularly real estate, by increasing market liquidity, which could allow developers to accelerate ongoing projects and launch new ones. In addition, lower borrowing costs on new and existing floating-rate home loans are likely to boost housing sales."
Meanwhile, the RBI retained India's CPI inflation forecast for FY25 at 4.8 per cent and projected inflation at 4.2 per cent for FY26. Retail inflation in December 2024 declined to a four-month low of 5.22 per cent, largely driven by a drop in food prices. The RBI Governor also highlighted that the agricultural focus in the FY26 Union Budget will play a critical role in keeping inflation under control.
From a technical perspective, Nifty formed an inverted hammer candlestick pattern during the session at the 50-day EMA, with an RSI of 45. Market analysts suggest that in the next session, Nifty could find support between 23,210 and 23,100, while resistance is expected around 23,510 and 23,580.
While the rate cut is expected to provide relief to interest-sensitive sectors like real estate and automobiles, investors remain cautious as they assess the broader economic impact of the RBI's policy stance.
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