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Markets cheer RBI's jumbo rate cut; Sensex ends 746.95 points higher
Benchmark equity indices surged on Friday to post their biggest single-day gains in three weeks after the Reserve Bank of India (RBI) trimmed interest rates by 50 basis points.
The 30-share BSE Sensex jumped 746.95 points, or 0.92 per cent, to settle at 82,188.99. The 50-share NSE Nifty reclaimed the 25,000-level and climbed 252.15 points, or 1.02 per cent, to settle at 25,003.05.
Interest-rate-sensitive realty index soared 4.74 per cent, while auto index raced 1.50 per cent and bankex climbed 1.25 per cent.
Friday's rally added ₹3.6 trillion to the market capitalisation of BSE-listed firms, which now stands at ₹451 trillion.
With the latest reduction, the RBI has now cut interest rates by a total of 100 basis points in 2025, starting with a quarter-point reduction in February — the first cut since May 2020.
Additionally, the RBI slashed the cash reserve ratio by 100 basis points to 3 per cent, a phased cut effective between September and December. These measures are expected to inject ₹2.5 trillion into the financial system.
"Several external headwinds — ranging from US tariff policies and global trade tensions to sluggish worldwide growth and geopolitical risks — have weighed on domestic economic prospects, reinforcing the rationale for monetary easing,' said Dhiraj Relli, managing director and CEO of HDFC Securities.
'With enhanced liquidity and reduced borrowing costs, conditions are now set for sustained economic momentum and a market recovery. This stimulus could propel Indian equity markets beyond their current trading range, potentially pushing the Nifty past 25,000 and toward previous highs of 26,200," Relli added.
The market breadth was positive, with 2,194 stocks advancing and 1,832 declining. Barring two, all Sensex stocks gained.
HDFC Bank, which rose 1.4 per cent, was the biggest contributor to Sensex gains, followed by Bajaj Finance, which rose by 4.9 per cent. Bajaj Finance was also the best performing stock on the Sensex.
"Monsoon-linked sectors such as fertilisers, agrochemicals, rural finance, and two-wheelers will be in focus, backed by forecasts of an above-average monsoon in 2025. We expect Indian markets to witness a gradual upgrade, supported by positive sentiment following an anticipated rate cut by RBI and optimism surrounding a potential US-India trade agreement with officials from both sides meeting in New Delhi this week to finalise the first phase of the proposed deal,' said Siddhartha Khemka, head of research, wealth management, Motilal Oswal Financial Services.
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