India’s benchmark indices surged on Friday after the Reserve Bank of India (RBI) reduced the repo rate by 50 basis points to 5.50 per cent and the cash reserve ratio (CRR) by 100 basis points, in four tranches.
The Sensex gained 746.95 points, or 0.92 per cent, to close at 82,188.99, while the Nifty rose 252.15 points, or 1.02 per cent, to end at 25,003.05.
The rally was led by banking stocks. The Nifty Bank index closed at 56,578.40, up 817.55 points or 1.47 per cent. During the session, Bank Nifty touched 56,695 – its highest level to date.
In addition to large-cap stocks, mid-cap and small-cap segments also saw gains. The Nifty Midcap 100 index rose by 707.30 points, or 1.21 per cent, to 59,010.30, while the Nifty Smallcap 100 index climbed 149.85 points, or 0.81 per cent, to 18,582.45.
Rupak De of LKP Securities said the sharp rise in the index followed what he described as a “bazooka policy move” by the RBI.
The significant rate cut and the liquidity boost via the CRR reduction are expected to facilitate a swift transmission of lower rates, reinforcing the RBI’s strong commitment to fostering economic growth, boosting investment, and stimulating consumption.
Rate-sensitive sectors such as banking, real estate, automobiles, and consumer durables are leading the rally, according to experts.
Going forward, the impact of the rate cut is expected to continue influencing market sentiment.
