What Led to RBI MPC Decisions Ending an 8-Day Losing Streak?
Click to start listening
Synopsis
The Indian equity markets rebounded dramatically on Wednesday, concluding an eight-day losing streak. This shift was driven by the RBI's decision to maintain the repo rate and an optimistic GDP forecast. Discover how these factors have influenced market sentiments.
Key Takeaways
- RBI held the repo rate at 5.5%.
- GDP growth forecast raised to 6.8% for FY26.
- Sensex gained 715.69 points, closing at 80,983.31.
- Nifty climbed 225.20 points, finishing at 24,836.30.
- Automobile sales data boosted market sentiment.
Mumbai, Oct 1 (NationPress) The Indian equity markets experienced a significant rebound on Wednesday, breaking an eight-day losing streak thanks to robust buying activity. This surge followed the Reserve Bank of India’s (RBI) announcement to maintain the repo rate at 5.5%, alongside an upgraded GDP growth forecast raised to 6.8% for FY26 from a previous estimate of 6.5%.
The optimistic sentiment was further bolstered by strong automobile sales data for September.
The Sensex concluded the day at 80,983.31, gaining 715.69 points or 0.89%. Although it opened lower at 80,159.90 compared to the last session's closing of 80,267.62, the index rallied sharply after the RBI's decision, reaching an intraday high of 81,068.43.
The Nifty finished at 24,836.30, up by 225.20 points or 0.92%.
“The Nifty displayed a strong bullish candlestick pattern post-RBI policy announcement and encouraging auto sales data, reclaiming levels above its 100-day EMA at 24,750, which had previously served as resistance,” stated analysts.
Top gainers in the Sensex included Tata Motors, Kotak Bank, Trent, Sun Pharma, Axis Bank, ICICI Bank, Tech Mahindra, HDFC Bank, Adani Ports, Mahindra and Mahindra, Eternal, Titan, TCS, ITC, BEL, and Hindustan Unilever. Conversely, Bajaj Finance, Ultratech Cement, SBI, and Asian Paint experienced declines.
Sectoral indices reflected a similar positive trend with value buying. The Nifty Bank increased by 712 points or 1.30%, Nifty Fin Services climbed by 360 points or 1.38%, Nifty Auto surged 226 points or 0.85%, Nifty FMCG rose 394 points or 0.72%, and Nifty IT jumped 250 points or 0.74%.
Broader indices followed suit, with Nifty Small Cap 100 climbing 193 points or 1.10%, Nifty Midcap 100 soaring 500 points or 0.89%, Nifty 100 gaining 207 points or 0.82%, and Nifty Next 50 closing 242 points or 0.36% higher.
Point of View
It's essential to recognize that the recent RBI decisions reflect a cautious yet optimistic approach to India's economic recovery. Maintaining the repo rate signals stability, while the revised GDP forecast indicates confidence in growth. The market's response underscores the importance of strategic financial policies in fostering investor sentiment.
NationPress
01/10/2025
Frequently Asked Questions
What was the reason for the market surge?
The surge was primarily due to the RBI's decision to keep the repo rate unchanged at 5.5% and the improvement in the GDP growth forecast to 6.8% for FY26.
How did the Sensex and Nifty perform?
The Sensex closed at 80,983.31, up by 715.69 points, while the Nifty finished at 24,836.30, gaining 225.20 points.
Which sectors showed significant gains?
Significant gains were observed in the Nifty Bank, Nifty Fin Services, Nifty Auto, Nifty FMCG, and Nifty IT sectors.
