The Indian stock market saw a strong rally on Friday following the Reserve Bank of India’s (RBI) decision to cut the repo rate by 25 basis points in its fifth bi-monthly monetary policy for FY26. The Sensex surged 338.39 points, or 0.40%, to 85,603.71, while the Nifty 50 gained 109.05 points, or 0.42%, to 26,142.80. The Bank Nifty also rose 0.55%. Rate-sensitive sectors, including realty, auto, NBFCs, PSU banks, and IT, led the gains. Top Nifty 50 gainers included Shriram Finance, Bajaj Finance, Hindalco, Bajaj Finserv, and Infosys, while Hindustan Unilever, Interglobe Aviation, Sun Pharma, Trent, and Tata Motors lost ground.
The RBI’s Monetary Policy Committee, led by Governor Sanjay Malhotra, unanimously reduced the repo rate to 5.25% while maintaining a neutral stance. GDP growth for FY26 was raised to 7.3% from 6.8%, and CPI inflation forecast lowered to 2%. The RBI described the economy as in a “Goldilocks” phase with strong growth and subdued inflation.
To support liquidity, RBI plans OMO purchases of ₹1 lakh crore and a USD/INR swap auction of $5 billion. Analysts expect the rupee to remain volatile in the 89.40–90.95 range amid these measures.
