Markets close firmly higher on aggressive rate cut by RBI

CHENNAI: Indian equity markets staged a sharp recovery and ended the session on a strong note Friday, buoyed by the Reserve Bank of India’s (RBI) unexpected 50 basis points repo rate cut — a move that boosted investor sentiment and triggered broad-based buying.

After a choppy start, the benchmark Sensex surged to an intraday high of 82,299.89 before settling at 82,189, up 746.95 points, or 0.92%. The Nifty50 also closed firmly above the 25,000-mark at 25,003.05, rising 252.15 points, or 1.02%.

The bullish momentum was mirrored across broader markets, with the Nifty MidCap and Nifty SmallCap indices advancing 1.28% and 0.92%, respectively.

The rally was triggered by the RBI’s Monetary Policy Committee (MPC), which delivered a surprise 50-bps repo rate cut, bringing the benchmark lending rate down amid rising global growth concerns. In a shift in tone, the central bank also moved its policy stance from ‘Accommodative’ to ‘Neutral’. To support systemic liquidity, the RBI also announced a phased 100-basis-point cut in the Cash Reserve Ratio (CRR).

Despite the aggressive front-loading of policy support, RBI Governor Sanjay Malhotra signaled limited room for further rate cuts in the near term, even as he confirmed unanimous MPC backing for the current stance.