Stock market today: Indian indices, Sensex and Nifty 50, rallied in Friday’s trading session after the Reserve Bank of India (RBI) held the repo rate unchanged at 5.25% and announced a slew of measures along with the government to attract foreign capital amid relentless overseas outflows.
Sensex jumped 300 points, climbing above the 74,500 mark; meanwhile, Nifty 50 was trading near the 23,500 level. Bank Nifty also rose over 250 points to 54,572.
Market sentiment across sectors remained largely upbeat, with most Nifty indices advancing during the session. Nifty Media led the gains, rising more than 3%, while Realty and Financial Services also posted strong performances. Banking, PSU Bank, and Consumer Durables stocks witnessed healthy buying interest. In contrast, Metal, FMCG, IT, and Oil & Gas indices edged lower, reflecting mild profit-taking in defensive and commodity-oriented segments.
“From a market perspective, the absence of a rate hike provides relief to interest-rate-sensitive sectors such as banking, NBFCs, real estate, and automobiles. However, the higher inflation outlook and reduced growth forecast suggest that future monetary easing may be limited,” said Seema Srivastava, Senior Research Analyst at SMC Global Securities.
Key factors driving the Indian stock market
1] RBI MPC Meeting
On Friday, India’s central bank left the policy repo rate unchanged at 5.25%, despite inflation concerns and growing tensions in the Middle East.
“Overall, this is a balanced and forward-looking policy stance, supportive for markets while maintaining macro stability. For markets, the message is clear- stability remains the priority, with a balanced and careful approach in a more uncertain environment,” said Vaibhav Chugh, CEO, Abakkus Mutual Fund.
2] Govt scraps capital gains for FIIs on G-secs
The Indian government on Friday announced a capital gains tax exemption for foreign institutional investors and the Bank for International Settlements on income generated from interest payments or the sale of government securities.
The move, outlined in a government statement, is intended to attract more stable foreign investment flows at a time when the rupee has depreciated by more than 6% this year, pressured by higher oil prices and persistent outflows from the equity market.
“The FII tax benefits added a positive catalyst for broader foreign sentiment and liquidity. Overall, the outcome supports a neutral-to-positive near-term outlook with range-bound trading, though volatility may persist based on global cues, inflation data, and the Governor’s full commentary tone. Long-term, policy stability and tax measures could aid valuations if external risks are managed,” said Santosh Meena, Head of Research at Swastika Investmart.
3] Rupee rebounds
The rupee strengthened by 50 paise to 95.24 against the US dollar following the measures announced by the central bank and the government to attract foreign inflows.
“We see scope for the rupee to appreciate towards 94 to 94.5 on spot over the near term, with the upside in USDINR now capped around the 96 mark. Any appreciation beyond 94 would depend on the actual quantum of dollar mobilisation through these newly announced routes and the trajectory of oil prices. With reserves at $682 billion, the RBI has ample ammunition to manage volatility while these flows gain traction,” said Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities.
4] Rate sensitive sectors
Interest rate-sensitive sectors led the gains on Friday following the policy announcement. Banking stocks attracted strong buying interest across the board, with the Nifty Bank index seeing broad-based advances. Among its constituents, IndusInd Bank was the top performer, climbing 2%.
Realty stocks outshone other rate-sensitive sectors, with nearly all stocks in the index trading in positive territory. Prestige Estates emerged as the biggest gainer, surging more than 3.5%.
The auto sector also traded in the green, though gains were selective rather than widespread. Tube Investments of India advanced 1.5%, while Exide Industries, Mahindra & Mahindra, Uno Minda, and Bharat Forge each rose over 0.5%.
“The Indian stock market reacted with a mild positive relief rally as the widely expected rate hold removed uncertainty. Nifty 50 and Sensex rose modestly (around 0.2-0.4%) post-announcement, with support in rate-sensitive sectors like banking, NBFCs, real estate, and autos due to stable borrowing costs,” said Meena.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
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