On April 9, rate-sensitive stocks like banks, NBFCs, and auto companies did better than the broader market, after the Reserve Bank of India (RBI) reduced the repo rate by 25 basis points. The new repo rate is now 6.25%, down from 6.5% earlier. Along with this cut, the RBI also changed its policy stance to ‘accommodative’, which means it is now more focused on supporting growth.
This is the first time in five years that the RBI has reduced interest rates. Investors are hopeful that lower rates will reduce borrowing costs for people and companies. This can increase demand for loans, homes, and vehicles. As a result, companies in the banking, auto, and housing finance sectors are expected to benefit in the coming quarters.
Even though the Nifty 50 and Sensex were down by more than 0.5% around 10:10 am, the Nifty Auto index stayed flat. The Bank Nifty and Nifty Private Bank indices were slightly lower by about 0.3%, showing stronger performance compared to the broader market.
The RBI made this decision while keeping in mind global uncertainties and the possible impact of inflation, economic slowdown, and currency movements. Ongoing international issues like US tariff threats also influenced the MPC’s thinking.
Experts believe that if inflation stays under control, more rate cuts could be possible in future meetings, which would further support the Indian stock market — especially rate-sensitive sectors.
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Source: Moneycontrol.
News Desk
