Rate-sensitive stocks soar as RBI keeps repo rate unchangedAI Quick ReadRBI Policy: Interest rate-sensitive sectors soared after the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) unanimously kept the repo rate unchanged at 5.25% and retained its neutral stance, as widely expected by the markets amid the ongoing US-Iran war.
Overall, the Indian stock markets also witnessed a broader rally, with the benchmark indices Sensex and Nifty 50 soaring over 3.5% each after the US and Iran agreed to a two-week ceasefire deal, leading to a rally in global markets. Meanwhile, a sharp fall in crude oil prices as well as the dollar also aided the sentiment on Dalal Street. The ceasefire deal is expected to halt the American-Israeli military attacks in exchange for Tehran reopening the Strait of Hormuz. Pakistan, which brokered the ceasefire deal, says it extends to Israel and Hezbollah fighting in Lebanon.
While the rate-sensitive sectors also started the session on a strong note, they extended gains after the policy announcement. While Nifty Bank and Nifty Financial Services jumped over 5% each; Nifty Auto and Nifty Realty soared over 7% each.
Moreover, RBI projected India’s GDP growth at 6.9% for FY27, indicating a steady economic expansion through the year. Meanwhile, for FY27, the RBI projected CPI inflation at 4.6%.
"Aided by the 2-week ceasefire and the consequent crash in Brent crude to about $95 level, the RBI Governor sounded optimistic, though guarded, in his monetary policy message. The ‘no rate change’ policy and the neutral policy stance are on expected lines. The projection of FY27 GDP growth rate at 6.9% and credit growth at around 14 % augur well for the stock market and financial stocks in particular.
Directives by the RBI earlier to curb excessive speculation in the currency markets have yielded results and the rupee has appreciated to 92.55 levels from 95.30 touched on March 30.
The crash in crude and recovery in the rupee is likely to stem the FPI outflows. Aggressive buying by DIIs and retail investors will keep the market resilient in the near-term," V K Vijayakumar, Chief Investment Strategist, Geojit Investments said.
The Nifty Bank index advanced as much as 5.3% in intra-day deals will all stocks in the index trading positively. AU Small Finance Bank was the top gainer, rising 8% followed by Union Bank, up over 7% each. Meanwhile, IndusInd Bank, Bank of Baroda, Axis Bank, Canara Bank, IDFC First Bank, Punjab National Bank, ICICI Bank, HDFC Bank, and YES Bank, advancing between 5-7% each. Meanwhile, SBI, Kotak Bank and Federal Bank also rose over 3.5% each.
Meanwhile, the Nifty Financial Services index added 5.6% today. Shriram Finance was the top gainer in the index, up 11% followed by Chola Finance, rising 9%. Meanwhile, Max Finance, Bajaj Finance, Bajaj Finserv, Muthoot Finance advanced over 7% each. SBI Cards, Jio Financial, SBI Life, and REC were also up between 3.5-5% each.
Meanwhile, Nifty PSU Bank also soared 5.5% while Nifty Private Bank index was up 5.1%.
While the auto sector rose 7%, its constituents also rallied. Ashok Leyland soared almost 13%, followed by Motherson Sumi and Tata Motors PV, up 9% each. Meanwhile, Uno Minda, M&M, Bosch, Maruti, TVS Motor, Eicher Motors, Bharat Forge, TI India, Exide Industries, and Hero Moto rose between 5-7.5% each.
In the realty sector, Aditya Birla Realty surged 9% while Lodha jumped 8%. Prestige, Phoenix, Sobha, Godrej Properties, DLF, Oberoi Realty, Anant Raj and Brigade Enterprises also added 5-8% today.
"For the real estate sector, this continuity in interest rates plays a crucial role in sustaining momentum. Stable borrowing costs help preserve affordability for homebuyers while also enabling developers to plan with greater confidence. In an environment where sentiment can be easily influenced by macroeconomic signals, the absence of rate volatility acts as a reassuring factor for the market. With financing costs remaining steady, prospective buyers are better positioned to evaluate and commit to long-term investments such as homeownership.
Overall, the RBI’s decision supports a balanced environment for the real estate sector, helping maintain demand traction and providing the confidence needed for continued market activity in the near term," said Shishir Baijal, International Partner, Chairman & Managing Director, Knight Frank India.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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