Market bulls pushed benchmark indices higher on Thursday after the Reserve Bank of India announced a 25-basis-point cut in the repo rate, boosting investor sentiment across financial markets. At 11:07 am, the Sensex was trading at 85,588.55, up 323.23 points or 0.38 per cent, while the Nifty rose 103.10 points or 0.40 per cent to 26,136.85.
Among the top performers on the Sensex were Bajaj Finance, which gained 2.62 per cent, followed by Shriram Finance at 1.94 per cent, Bajaj Finserv at 1.84 per cent, HCL Tech at 1.81 per cent, and Hindalco at 1.52 per cent. Meanwhile, Reliance Industries, Trent, Tata Steel, Bharti Airtel, Tata Motors PV, Sun Pharma, and Titan acted as notable drags on the index. In the broader market, the Nifty Midcap index dipped 0.07 per cent, while the Nifty Smallcap index declined 0.30 per cent, signalling selective weakness in smaller stocks. Sectorally, Nifty Pharma and Nifty Metal were the biggest laggards, slipping 0.3 per cent each, whereas Nifty Realty outperformed with a 0.28 per cent rise.
Following the policy announcement, the Nifty Bank index staged a strong rebound, recovering more than 500 points from its lows. The Nifty itself regained close to 150 points, reflecting an overall improvement in market mood. While most major indices, including midcaps, moved higher, the Nifty Smallcap 100 remained under pressure, indicating cautious sentiment in the most speculative pockets of the market. Other sectoral gainers included Nifty PSU Bank, Nifty Realty, and Nifty Financial Services, which moved up in line with expectations after the rate cut.
Commenting on the economic backdrop, RBI Governor Sanjay Malhotra said that despite global uncertainties, the Indian economy continues to demonstrate strong resilience and is on track to deliver high growth. This marks the fourth repo rate cut in 2025. The RBI MPC had lowered the rate by 25 bps each in February and April, followed by a larger 50 bps reduction in June. With today’s move, the repo rate has been slashed by a cumulative 125 bps, down from 6.5 per cent at the beginning of the year.
Market analysts noted that banking stocks were rallying not only due to the monetary policy measure but also because of stock-specific developments. Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that select banks were benefiting from individual corporate triggers. Kranthi Bathini, Equity Strategist at WealthMills Securities, expects the rally in the banking segment to sustain, supported by expectations of strong earnings in the coming quarters. Among large banks, SBI has surged over 28 per cent so far this year, while HDFC Bank and ICICI Bank have gained 15 per cent and 10 per cent respectively.