Sensex rises 400 pts after RBI maintains status quo; Nifty tops 24,600, Realty index jumps 2.5%

Indian equity benchmarks edged higher after the Reserve Bank of India's (RBI) monetary policy announcement, as the central bank's decision to keep interest rates unchanged and retain its neutral stance was largely in line with market expectations.

Around 11 a.m., the BSE Sensex was up 438.06 points, or 0.56%, at 78,867.01, while the NSE Nifty50 gained 13.05 points, or 0.06%, to trade at 24,629.25, holding firmly above the 24,600 mark.

Market sentiment received a boost after the RBI raised its FY27 GDP growth forecast to 6.7% from 6.6% and lowered its inflation projection to 5% from 5.1%, reinforcing confidence in the domestic economic outlook despite persistent global uncertainties.

Realty, auto stocks lead sectoral gains

Among sectoral indices, rate-sensitive segments witnessed a mixed reaction. The Nifty Realty index emerged as the top performer, rising 2.5%, as investors welcomed the RBI's improved growth outlook and the continued pause in interest rates. The Nifty Auto index gained 1.4%, supported by expectations that stable borrowing costs would continue to underpin vehicle demand.

Banking stocks, however, remained largely range-bound. The Nifty PSU Bank index advanced nearly 1%, while the Nifty Private Bank index slipped 0.4%. The broader Nifty Financial Services index was little changed, indicating that investors had largely priced in the policy decision ahead of the announcement.

M&M, IndiGo, NTPC among top Sensex gainers

In the Sensex pack, Mahindra & Mahindra led the gains with a rise of nearly 2%, buoyed by strength in auto stocks. InterGlobe Aviation (IndiGo) climbed around 1.8%, followed by NTPC (up 1.6%), State Bank of India (up 1.5%), Tech Mahindra (up 1.4%) and Larsen & Toubro (up 1.3%). UltraTech Cement, Bajaj Finserv, Eternal (formerly Zomato), Kotak Mahindra Bank and Maruti Suzuki also traded in positive territory, gaining between 0.6% and 1.3%.

On the downside, Bharat Electronics (BEL) emerged as the biggest laggard, declining around 0.8%. Sun Pharmaceutical Industries, Titan Company, Tata Consultancy Services (TCS) and Reliance Industries also traded lower, while Hindustan Unilever slipped marginally. Heavyweight banking stocks HDFC Bank, ICICI Bank and Axis Bank were largely flat, limiting gains in the benchmark indices.

Meanwhile, the India VIX, often referred to as the market's fear gauge, declined more than 2% to around 11.9, indicating easing volatility and suggesting investors were largely unfazed by the RBI's policy outcome.

Analysts see prolonged rate pause

Analysts said the RBI's decision reinforced its balanced policy approach by maintaining a pause on interest rates while upgrading the growth outlook and trimming the inflation forecast. With no major surprises from the Monetary Policy Committee (MPC), market participants are now expected to shift their focus to corporate earnings, the progress of the monsoon, global crude oil prices and the RBI's October policy review.

"The RBI's decision to maintain the repo rate while retaining its neutral stance was largely anticipated, as inflationary pressures have eased slightly and growth has remained resilient. While oil prices have corrected, monsoon-related uncertainties remain a key risk to the inflation outlook and will be closely watched," said Dnyanada Vaidya, Research Analyst – BFSI at Axis Direct.

Ajit Mishra, SVP – Research at Religare Broking, said that although India's macroeconomic fundamentals remain resilient and inflationary pressures are relatively contained, persistent global uncertainties, commodity price volatility and geopolitical risks warrant a cautious policy stance.

"By preserving policy flexibility, the MPC has struck the right balance between supporting economic growth and maintaining price stability. Its emphasis on a data-dependent policy framework provides the RBI with the necessary room to respond proactively to evolving domestic and global macroeconomic conditions, reinforcing confidence in India's macroeconomic and financial stability," he said.

Vikram Chhabra, Senior Economist at 360 ONE Asset, said the RBI is likely to remain on hold for an extended period if geopolitical tensions ease and the monsoon remains close to normal.

"However, if crude oil prices remain elevated and a weak monsoon disrupts agricultural output, leading to higher food inflation, the RBI may be compelled to raise interest rates towards the end of FY27," he said.

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