Sensex jumps nearly 600 points as RBI cuts repo rate by 50 bps; realty, bank, auto stocks surge

Mumbai: Benchmark equity indices Sensex and Nifty surged on Friday morning trade after the RBI cut repo rate by a higher-than-expected 50 basis points to prop up growth.

Recovering all the early lost ground, the 30-share BSE Sensex jumped 591.94 points to 82,033.98 in morning trade. The 50-share NSE Nifty climbed 205.2 points to 24,956.10.

Interest-rate-sensitive realty index jumped 2.80 per cent, while auto index surged 1.14 per cent and bankex climbed 0.98 per cent.

The RBI on Friday cut repo rate by a higher-than-expected 50 basis points to prop up growth, which has slowed to a four-year low of 6.5 per cent in FY25.

Following the rate cut, the key policy rate eased to a three-year low of 5.5 per cent, providing relief to home, auto and corporate loans borrowers.

This is the lowest repo rate in three years.

After a detailed assessment of the evolving macroeconomic and financial development, as well as the economic outlook, the Monetary Policy Committee (MPC) decided to reduce the repo rate by 50 basis points, RBI Governor Sanjay Malhotra said.

Malhotra, however, retained the GDP forecast for the current fiscal at 6.5 per cent. The inflation projection was lowered to 3.7 per cent from the earlier estimate of 4 per cent, supported by expectations of a good monsoon.

From the Sensex firms, Bajaj Finance, Axis Bank, Maruti, Kotak Mahindra Bank, IndusInd Bank, State Bank of India, Bajaj Finserv and HDFC Bank were among the major gainers.

Sun Pharma, Infosys, Nestle and HCL Tech were the laggards.

"A third straight cut in the repo rates this year with 50 bps cut instead of an estimate of 25 bps is a pleasant move. This demonstrates a pro-growth stance and a front-loading of rate cuts given our stable economic growth and declining inflation. A change in policy stance from accommodative to neutral is also justified as it can help to strike a right balance between growth and inflation, especially if geopolitical issues escalate further," Umeshkumar Mehta, CIO, SAMCO Mutual Fund, said.

In Asian markets, South Korea's Kospi and Japan's Nikkei 225 index were trading in the positive territory while Shanghai's SSE Composite index and Hong Kong's Hang Seng quoted marginally lower.

US markets ended lower on Thursday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 208.47 crore on Thursday, according to exchange data.

Global oil benchmark Brent crude dipped 0.28 per cent to USD 65.16 a barrel.

On Thursday, the 30-share BSE Sensex climbed 443.79 points or 0.55 per cent to settle at 81,442.04. The Nifty rose 130.70 points or 0.53 per cent to 24,750.90.