RBI’s 25 bps Rate Cut Triggers Mixed Reaction Across Rate-Sensitive Stocks

Market Performance

On April 9, rate-sensitive sectors witnessed varied movements following the Reserve Bank of India's (RBI) latest monetary policy decision. The central bank's Monetary Policy Committee (MPC) reduced the repo rate by 25 basis points, shifting the monetary stance to 'accommodative'.

Policy Update

The RBI's repo rate now stands at 6.25%, down from 6.5%, following a unanimous decision by the MPC. This move marks the first rate reduction in five years and comes amid global economic uncertainties that could affect domestic growth, inflation dynamics, and currency movements.

The MPC's decision reflects concerns over ongoing global tensions and their potential repercussions on the Indian economy. Heightened risks surrounding international trade and policy adjustments were key considerations during the review.

Summary

The Reserve Bank of India has lowered the repo rate was cut by 25 basis points, reducing it to 6.25%, and adjusted its policy stance to 'accommodative'. This monetary shift comes at a time of increased global uncertainty, with likely implications for India's economic outlook. Rate-sensitive sectors reacted differently to the announcement—while auto stocks showed slight optimism, banking and real estate counters registered declines.