Markets Cheer RBI's Growth-Focused Rate Cut
Indian equity benchmarks staged a strong rally on Friday, propelled by the Reserve Bank of India's decision to reduce key interest rates in a bid to bolster economic momentum. After initial volatility, the Sensex climbed 425.57 points to close at 85,698.23, while the Nifty 50 advanced 136.65 points to settle at 26,169.90.
The central bank's Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, announced a unanimous cut in the repo rate—the rate at which it lends to commercial banks—by 25 basis points to 5.25%. This move, part of the fifth bi-monthly policy for the fiscal year, maintains a neutral stance and aims to support an economy that grew at a robust 8.2% in Q2, a six-quarter high.
Analysts believe this reduction will translate into more affordable credit for consumers and businesses, potentially stimulating demand in sectors like housing, automobiles, and commercial lending. The decision comes even as the central bank monitors concerns around rupee depreciation.
Expert Market Views and Technical Levels
Prashanth Tapse, Research Analyst and Senior VP of Research at Mehta Equities, provided a cautious yet detailed technical perspective. He noted that the Nifty 50 faced selling pressure near higher levels, failing to build strength above 26,000.
Key resistance for Nifty is seen between 26,098–26,154, with immediate support at 25,960 and 25,890. A sustained close above 26,154 is needed for the index to regain strength; until then, the broader sentiment remains cautious. Traders are advised to avoid aggressive long positions.
Bank Nifty continued to show weakness, facing selling near the 59,546–59,600 resistance zone. Its immediate support lies at 59,062, with a crucial level at 59,000. A close below 59,000 could intensify bearish sentiment. Traders should adopt a defensive stance and consider fresh longs only on a decisive close above 59,600.
Short-Term Stock Recommendations
Prashanth Tapse recommends three stocks for short-term trading opportunities:
Adani Enterprises: Current Market Price (CMP) is ₹2,227 with a stop loss (SL) at ₹2,190. The stock shows encouraging action, holding above key support. Targets are set at ₹2,300, ₹2,357, and ₹2,400.
DLF: CMP is ₹721 with an SL of ₹702. The real estate major maintains a constructive upward structure, attracting buyers near support. Targets are ₹740 and ₹760.
SBI Card: CMP is ₹878 with an SL of ₹840. The stock displays signs of steady accumulation with a base near ₹850–860. The target is set at ₹950.
Disclaimer: The views and recommendations are those of individual analysts and not of Mint. Investors are advised to consult certified experts before making any investment decisions.
