RBI Rate Cut Impact on Stock Market: Banks, NBFCs, Auto & Realty shine up to 2%

RBI Monetary Policy: The Nifty index surged to the day’s high of 26,102.05 following the Reserve Bank of India’s announcement of a 25 basis points rate cut, bringing the repo rate down to 5.25 per cent. The Nifty Bank index also rose, closing at 59,531.70, up 243 points (0.41 per cent) and touching an intraday high of 59,658.65.

Nifty Bank up 0.5%

Market breadth was strong in the banking space, with 10 of 12 stocks advancing. Among the top gainers, AU Small Finance Bank jumped 12.65 points to 961.40, IDFC First Bank rose 0.88 points to 80.76, and PNB added 1.16 points to 120.69. Kotak Mahindra Bank climbed 16.60 points to 2,152.00, while HDFC Bank gained 4.40 points to 1,001.60. ICICI Bank was up 6 points to 1,392.70, Canara Bank surged 0.56 points to 147.95, and Federal Bank added 0.95 points to 259.60.

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Some stocks saw minor declines, with IndusInd Bank slipping 2.25 points to 860.75 and Axis Bank falling 4.80 points to 1,275.20. Bank of Baroda was down slightly by 0.65 points to 288.85, while SBI eased 4.75 points to 952.85.

RBI rate cut impact on Stock Market

Rate-sensitive sectors saw significant gains, with banking, NBFC, auto, and realty stocks rising up to 2 per cent. Financial stocks climbed up to 1.5 per cent, led by AU Small Finance Bank, Kotak Mahindra Bank, and IDFC First Bank, which gained between 1 per cent and 1.5 per cent. Heavyweights HDFC Bank and ICICI Bank were up 0.3 per cent each.

Realty stocks including Brigade Enterprises, Oberoi Realty, Prestige Estates Projects, and DLF rose between 1 per cent and 2 per cent. Among auto stocks, Maruti Suzuki, Eicher Motors, and Mahindra & Mahindra gained up to 1 per cent.

The monetary policy committee (MPC) has now lowered the repo rate by a cumulative 125 basis points since February. The committee had kept rates unchanged in August and October.

RBI cuts repo rate by 25 bps to 5.25%

Announcing the decision, RBI Governor said, “The MPC met on the 3rd, 4th, and 5th of December to deliberate and decide on the policy repo rate. After a detailed assessment of the evolving macroeconomic conditions and outlook, the MPC voted unanimously to reduce the policy repo rate by 25 basis points to 5.25 per cent, with immediate effect.”