The Indian equity markets slipped into the red on Friday as investors digested the Reserve Bank of India’s latest policy decision. Nifty and Sensex slipped after RBI holds repo rate, and the reaction was immediate across rate-sensitive pockets of the market.
The RBI’s Monetary Policy Committee decided to keep the repo rate unchanged at 5.25% and retained a neutral policy stance. While the decision signaled continuity, it was not enough to lift sentiment in the broader market.
As trading progressed, benchmark indices touched their day’s lows before recovering slightly, though losses persisted till late trade.
Market Performance: Benchmarks Trade Lower Post RBI Decision
Both frontline indices struggled to regain momentum after the policy announcement.
- Sensex slipped up to 368 points (0.44%), hitting an intra-day low of 82,945.56
- Nifty 50 declined as much as 136 points (0.53%) to 25,504.6
- Nifty Midcap and Nifty Smallcap indices underperformed, falling over 1% each
The selling pressure was more pronounced beyond the top 50 stocks, reflecting cautious undertones across the market.
Rate-Sensitive Sectors Drag the Market
The pressure was clearly visible in sectors closely linked to interest rates. Banking, real estate, and automobiles faced steady selling through the session.
- Nifty PSU Bank dropped 1.6–1.7%, emerging as the biggest sectoral loser
- Nifty Realty slid 1.5%
- Nifty Auto fell 1.1%
- Nifty Bank declined 0.7%
- Nifty Financial Services slipped 0.5%
- Nifty Private Bank ended marginally lower, down 0.2%
Investors remained cautious, choosing to trim positions rather than chase any immediate upside after the policy status quo.
IT, Metal, Pharma Extend Losses; FMCG Holds Firm
Weakness was not limited to rate-linked stocks. Selling extended across several defensive and cyclical sectors.
- Nifty IT tumbled over 2%, remaining under pressure
- Nifty Metal and Nifty Pharma closed more than 1% lower each
- Nifty FMCG stood out, ending the session largely flat
The mixed sectoral trend reflected selective participation rather than broad-based buying.
RBI Policy Outcome: What Changed, What Didn’t
The RBI’s policy decision came after a 25 basis point cut in December, which took the total cumulative reduction to 125 basis points since February last year.
Key policy takeaways:
- Repo rate unchanged at 5.25%
- Policy stance maintained at neutral
- RBI highlighted the resilience of domestic economic fundamentals
- Retail inflation (CPI) projected at 2.1% for FY26
- FY26 GDP growth forecast revised to 7.4% from 7.3%
Despite supportive macro numbers, equity markets chose caution over optimism in the near term.
Banking & Financial Stocks Under Pressure
Selling was broad-based within banking and financial services stocks.
Nifty Bank constituents losing ground included:
- Punjab National Bank
- IndusInd Bank
- Bank of Baroda
- Union Bank of India
- Canara Bank
- SBI
- YES Bank
- IDFC First Bank
- Federal Bank
(all down 1–2%)
Other movements:
- HDFC Bank and AU Small Finance Bank fell around 0.5%
- ICICI Bank, Axis Bank, and Kotak Bank managed to stay in the green
In financial services:
- Muthoot Finance declined nearly 3%
- REC, BSE, Shriram Finance, ICICI Prudential, HDFC Life, SBI Life, ICICI General Insurance fell between 1–3%
- Bajaj Finance remained positive
Auto & Realty Stocks Face Heavy Selling
Auto stocks largely remained under pressure, with only one stock managing to stay in the green.
Notable declines in auto stocks:
- Uno Minda down 4%
- Motherson and TI India fell over 3%
- Sona Comstar, Exide Industries, Bharat Forge, Bosch, Bajaj Auto down over 1%
- Ashok Leyland, Eicher Motors, TVS Motor, M&M, Maruti declined over 0.5%
- Hero MotoCorp traded higher
Nifty Realty stocks also struggled:
- Signature Global dropped over 3%
- Oberoi Realty and Godrej Properties fell over 2%
- Anant Raj, Lodha, Sobha, DLF, Brigade declined 0.5% to 1.5%
- Phoenix Mills gained 0.5%
Summary: Markets Stay Cautious After RBI Status Quo
To sum it up, Nifty and Sensex slipped after RBI holds repo rate, as investors chose caution over comfort. Despite stable rates, a neutral stance, and improved growth and inflation outlooks, markets reacted with short-term nervousness.
Broader indices underperformed, rate-sensitive sectors led the decline, and defensive pockets offered limited support. For now, the market appears to be in wait-and-watch mode, balancing strong macro numbers against immediate profit-taking pressure.
Source: Livemint
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