Benchmark indices surged in afternoon trade on Friday after the Reserve Bank of India announced a 25 basis point repo rate cut to support growth momentum, with the Sensex climbing 491.73 points or 0.58 per cent to 85,757.05 and the Nifty gaining 158.25 points or 0.61 per cent to 26,192.00 as of 12:50 pm.
The central bank maintained its neutral stance while revising inflation forecast for FY26 downward to 2 per cent from 2.6 per cent earlier, and raising growth projection to 7.3 per cent from 6.8 per cent. The RBI also announced open market operations worth ₹1 trillion and foreign exchange swaps of $5 billion to inject liquidity into the system. The 10-year government security yield moved lower by 3 basis points to around 6.48 per cent following the policy announcement.
Shriram Finance led Nifty gainers, surging 3.11 per cent to ₹853.90, followed by Bajaj Finserv up 2.70 per cent at ₹2,104.50, Bajaj Finance gaining 2.60 per cent to ₹1,055.90, Hindalco rising 2.21 per cent to ₹828.70, and HCL Tech advancing 2.16 per cent to ₹1,690.30. On the downside, Hindustan Unilever declined 3.59 per cent to ₹2,335.10, InterGlobe Aviation fell 2.95 per cent to ₹5,276.00, Trent dropped 0.62 per cent to ₹4,189.80, TVS Motor Company slipped 0.52 per cent to ₹354.60, and Sun Pharma declined 0.51 per cent to ₹1,809.00.
Naveen Kulkarni, Chief Investment Officer at Axis Securities PMS, said the rate cut was largely anticipated and banks are expected to manage the impact on net interest margins, with the credit growth revival supported by improved consumption demand. Deepak Agrawal, CIO-Debt at Kotak Mahindra AMC, noted the RBI has utilized policy space opened by falling inflation and expects the central bank to pause further rate actions.
Market breadth remained negative with 1,667 stocks advancing against 2,267 declining on the BSE, while 76 stocks hit 52-week highs and 230 touched 52-week lows. Sectoral indices showed mixed trends, with Nifty Financial Services up 0.99 per cent at 27,884.80 and Nifty Bank gaining 0.71 per cent to 59,711.80, while Nifty Smallcap 100 declined 0.72 per cent to 17,482.45.
Rahul Kalantri, VP Commodities at Mehta Equities, said the rupee is expected to remain volatile with the USD/INR likely trading between 89.40 and 90.95, as the liquidity injection creates a mild weakening bias for the domestic currency.
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Published on December 5, 2025
