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Informist, Friday, Dec. 5, 2025

By Gopika Balasubramanium

MUMBAI – A quarter point cut in the repo rate by the Reserve Bank of India improved the sentiment in the market, driving the indices to close higher. The rise in indices was largely led by shares of companies pertaining to banks, financial services, and information technology. The Reserve Bank of India cut the policy repo rate by 25 basis points and retained 'neutral' stance. 

The indices were choppy ahead of the RBI's monetary policy meeting outcome. They, however, rose steadily when the rate cut decision was announced. They briefly slipped into the red but recovered swiftly to end with robust gains. The Nifty 50 ended at 26186.45 points, up 152.70 points or 0.6%, a one-week closing high. The 50-stock index climbed to an intraday high of 26202.60 points for the first time since Monday. The BSE Sensex closed at 85712.37 points, up 447.05 points or 0.5%.

On a weekly basis, the Nifty 50 snapped the three continuous weeks of gains. The indices hit their respective record highs on Monday. However, later the indices fell due to concern about rupee hitting investor sentiment. The rupee ended at record closing lows in couple of sessions this week. This was mainly as banks bought dollars for importers and for foreign fund outflows from Indian equities on the back of a delay in US-India deal. However, information technology stocks which benefits from low rupee rose for three sessions in a row.       

The Nifty IT was among the best performing sectoral indices and ended 0.9% higher. The index is currently at a five-month high. Shares of companies such as HCL Technologies, Mphasis, Wipro, and Infosys ended 1-2% higher. Analysts said the elevated expectation of an interest rate cut by the US Federal Reserve is also a trigger driving the IT stocks. 

During the sessions, investors primarily bought shares of banks and non-banking financial companies. These sectors are highly rate-cut sensitive session. The Nifty PSU Bank, the Nifty Bank, and the Nifty Financial Services ended around 1-1.5% higher. Shriram Finance, Bajaj Finserv, and Bajaj Finance, which closed 2-3% higher, were the top gainers in the Nifty 50. Mahindra & Mahindra Financial Services closed 6% higher and topped the Nifty 200 index.

Earlier in the day, the RBI governor said the financial parameters of banks remained robust and that the credit facilities are seeing an uptick. This growth was supported by sustained lending to retail and services sector segments. "...the system-level parameters of NBFCs (non-banking financial services companies), too, are sound, with adequate capital position and improved gross non-performing asset ratios," RBI Governor Sanjay Malhotra said.

Real estate companies rose soon after the repo rate cut announcement. The RBI governor said that going forward, he expects policy rates to be low, given "inflation remains benign". Low repo rate is a positive for the real estate sector as it makes housing loans more affordable. Analysts said the rate cut would benefit the residential segment to build on the momentum created during the recent festival season and low goods and services tax rates of key construction materials. Lower borrowing costs will further improve affordability and sentiment among buyers, especially in affordable and mid-income housing segments, he said. 

* Of the Nifty 50 stocks, 38 rose and 12 fell

* Of the Sensex stocks, 23 rose and 7 fell

* On the NSE, 1,331 stocks rose, 1,769 fell, and 92 were unchanged

* On the BSE, 1,740 stocks rose, 2,423 fell, and 165 were unchanged

* Nifty PSU Bank: up 1.5%; Nifty Financial Services: up 1%; Nifty Media: down 0.5%

BSE                                              NSE

Sensex: 85712.37, up 447.05 points or 0.5%       Nifty 50: 26186.45, up 152.70 points or 0.6%

End

Edited by Akul Nishant Akhoury

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