The domestic benchmark indices turned the tables and rallied ahead after the RBI announced a pause in key rates today morning. The 30-share BSE Sensex climbed 715.69 points to close at 80,983.31, while the broader NSE Nifty50 rallied 225.20 points to settle at 24,836.30.
Notably, investors exhibited caution early today as markets awaited the central bank’s fiscal policy announcements. However, after Governor Sanjay Malhotra revealed that the MPC has decided to maintain status quo on key rates, both the benchmarks recovered and rallied ahead. This surge was led by buying in bank stocks and marks a recovery for markets after they witnessed eight consecutive sessions of decline.
Among the top gainers on the BSE Sensex were Tata Motors, Kotak Bank, Trent, Sun Pharma, Axis Bank, ICICI Bank, TechMahindra, HDFC Bank, Adani Ports, while the top laggards were NTPC, Maruti, Bajaj Finserv, Bharti Airtel, Asian Paints, and Tata Steel, among others.
Among the broader markets, the Nifty Microcap 250 climbed 1.39 per cent to stand at 23,205.05. At a sectoral level, Nifty Media jumped 3.97 per cent to stand at 1,604.25.
“The MPC delivered exactly a dovish pause which the market expected. But despite the policy being in line with market expectations, the market has given a thumbs up to the policy since the central bank delivered some unexpected pro-market initiatives like allowing banks to fund acquisitions…,” explained V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
RBI MPC Key Announcements
The MPC’s unanimous decision to maintain the repo rate followed a thorough assessment of India’s growth and inflation dynamics. The committee noted that headline inflation has moderated sharply in recent months, supported by a marked decline in food prices and the rationalisation of Goods and Services Tax (GST) rates.
Average headline inflation for FY2025-26 has been revised downward from 3.7 per cent in June and 3.1 per cent in August to 2.6 per cent. Headline inflation for Q4FY26 and Q1FY27 has also been lowered and remains broadly aligned with the RBI’s target, despite unfavourable base effects. Core inflation is expected to remain contained throughout the current fiscal year and into the first quarter of 2026-27.
The RBI emphasised that India’s economy remains resilient, with strong Q1 growth in FY2025-26 supported by robust private consumption and fixed investment. A favourable monsoon and GST rationalisation are expected to continue supporting growth while keeping inflation in check, although trade tariffs may weigh on export performance.
The central bank further raised FY26 GDP growth estimates to 6.8 per cent from 6.5 per cent earlier, and also reduced FY26 CPI inflation forecast to 2.6 per cent from 3.1 per cent earlier.
