India’s benchmark stock indices closed nearly 1% higher on Friday, buoyed by a surprise 50 basis point rate cut and a CRR reduction announced by the Reserve Bank of India (RBI), sending a strong pro-growth signal that lifted investor sentiment across the board.
The BSE Sensex surged 746.95 points to settle at 82,188.99, and the NSE Nifty50 jumped 252.15 points, ending above the 25,000 mark at 25,003.05 — a psychologically important level.
RBI POLICY BOOSTS SENTIMENT
Dr. Manoranjan Sharma, Chief Economist at Infomerics, highlighted that the Monetary Policy Committee’s decision to cut the repo rate by 50 bps exceeded market expectations. Additionally, the CRR was reduced by 100 bps (from 4% to 3%), to be implemented in four staggered 25 bps tranches starting September 6 through November 29, aimed at infusing durable liquidity into the banking system.
Vinod Nair of Geojit Investments remarked that the combination of liquidity expansion and growth-oriented policy is likely to sustain investor optimism, especially amid continued global macroeconomic uncertainty.
SECTORAL AND STOCK PERFORMANCE
The rally was broad-based, with gains led by rate-sensitive sectors:
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Nifty Realty: +4.68% (best performing sector)
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Nifty Financial Services: +2.09%
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Nifty Private Bank: +1.79%
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Nifty Auto: +1.52%
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Nifty Metal: +1.50%
Other sectors also closed in the green:
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Consumer Durables: +1.32%
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Oil & Gas: +0.57%
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PSU Banks: +0.58%
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IT, Healthcare, FMCG, Pharma: Minor gains under +0.5%
Only Nifty Media ended lower, down 1.14%, indicating selective weakness.
TOP GAINERS AND LAGGARDS
Biggest gainers on the BSE Sensex:
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Bajaj Finance: +4.93%
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Axis Bank: +3.15%
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Maruti Suzuki: +2.64%
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IndusInd Bank: +2.50%
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Bajaj Finserv: +2.36%
Notable underperformers:
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Bharti Airtel: -0.39% (only significant loser)
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Sun Pharma: Slight uptick of +0.20%
MARKET BREADTH & VOLATILITY
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Nifty Midcap 100: +1.21%
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Nifty Smallcap: +0.81%
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India VIX: -3.00%, signaling declining market fear and higher risk appetite among investors.
Outlook
The market’s strong positive reaction to the RBI’s unexpectedly accommodative stance suggests continued bullish momentum, especially in banking, real estate, and auto sectors. However, traders will watch for global cues and inflation data to assess how long the rally can be sustained.
