Indian Equity Markets Close Higher Following RBI Policy Announcement
Indian stock markets ended Friday's trading session with modest gains after the Reserve Bank of India's Monetary Policy Committee unanimously decided to keep interest rates unchanged at 5.25 percent. The central bank's widely anticipated decision to maintain the status quo was accompanied by a significant proposal to allow banks to extend lending facilities to Real Estate Investment Trusts (REITs) under specific prudential safeguards.
Market Performance and Key Movements
The benchmark 30-share BSE Sensex rose 266.47 points, representing a gain of 0.32 percent, to close at 83,580.40. The index demonstrated remarkable resilience during the final hour of trading, recovering sharply by jumping over 650 points from its intraday low of 82,925.35. This late surge was primarily driven by strategic buying in select heavyweight stocks.
Similarly, the broader NSE Nifty index finished higher by 50.90 points, or 0.20 percent, settling at 25,693.70 after navigating through a particularly volatile trading session. The markets had opened cautiously in the morning, initially slipping into negative territory before staging a gradual recovery throughout the day.
Top Performers and Underperformers
Nifty 50 Top Gainers:
- ITC: +5.21% (Rs 326.35)
- Kotak Bank: +3.33% (Rs 422.35)
- Hindustan Unilever: +2.97% (Rs 2,424)
- Bajaj Finance: +1.79% (Rs 982.00)
- Bharti Airtel: +1.54% (Rs 2,023)
Nifty 50 Top Losers:
- HDFC Life: -2.39% (Rs 703.50)
- Tech Mahindra: -1.84% (Rs 1,616)
- Tata Consultancy Services: -1.72% (Rs 2,940)
- SBI Life: -1.54% (Rs 1,987)
- Tata Motors PV: -1.41% (Rs 368.90)
Among Sensex constituents, ITC emerged as the standout performer with an impressive gain exceeding 5 percent. Other significant contributors to the index's upward movement included Kotak Mahindra Bank, Hindustan Unilever, Bharti Airtel, Bajaj Finance, Power Grid, and Bajaj Finserv, all of which closed in positive territory.
Conversely, several technology and infrastructure stocks faced selling pressure, with Tata Consultancy Services, Tech Mahindra, Adani Ports, Asian Paints, Eternal, and HCL Technologies among the notable laggards during the session.
RBI Policy Details and Market Implications
The Reserve Bank of India's six-member Monetary Policy Committee maintained the repo rate at 5.25 percent while retaining its neutral monetary policy stance. This decision reflects the central bank's assessment that inflationary pressures remain under control and growth concerns have eased following increased government spending in the recent budget and reduced tariff tensions after a trade agreement with the United States.
RBI Governor Sanjay Malhotra announced during the policy announcement, "To further promote financing to the real estate sector, it is proposed to allow banks to lend to REITs with certain prudential safeguards." Market analysts believe this regulatory development could significantly enhance long-term funding visibility for the real estate sector and contribute to strengthening the broader credit ecosystem.
Expert Analysis and Global Context
Vinod Nair, Head of Research at Geojit Investments Limited, commented on the day's market dynamics, noting that domestic markets remained relatively subdued for most of the trading session before recovering on the back of strategic buying in fast-moving consumer goods and private banking stocks.
"The RBI's policy announcement was broadly in line with expectations, maintaining status quo on interest rates while reiterating a constructive growth outlook," Nair stated. However, he added that market participants had anticipated a slightly more dovish tone from the central bank. The RBI's decision to maintain a neutral stance contributed to a rise in India's 10-year government bond yields.
Nair further highlighted that global investors continue to monitor several key factors, including ongoing US-Iran negotiations, fluctuations in crude oil prices, and significant developments in artificial intelligence and technology sectors.
In global market developments, Asian indices presented a mixed picture with South Korea's Kospi, Shanghai's SSE Composite, and Hong Kong's Hang Seng closing lower, while Japan's Nikkei finished in positive territory. European markets were predominantly trading in the green during the session. Overnight, US stocks had experienced sharp declines, with the technology-heavy Nasdaq index falling 1.59 percent.
Meanwhile, Brent crude oil prices rose 1.20 percent to reach $68.34 per barrel. This market movement follows Thursday's trading session where the Sensex had dropped over 500 points and the Nifty had declined more than half a percent.
Foreign institutional investors demonstrated a cautious approach, selling shares worth Rs 2,150.51 crore on Thursday, according to the latest exchange data. The combination of domestic policy developments and global economic factors continues to shape investor sentiment in the Indian equity markets.
