Indian equities end marginally higher following RBI monetary policy announcement
New Delhi, August 5
Indian stock markets closed in the green on Wednesday as investors processed the central bank's monetary policy decisions alongside key macroeconomic indicators. The BSE SENSEX advanced 152.05 points, or 0.19 per cent, to end at 78,581.00, while the NSE NIFTY 50 settled at 24,624.65, higher by 9.75 points or 0.04 per cent.
Analysts noted that market participants responded positively to the central bank's steady stance on policy rates and growth prospects.
Vinod Nair, Head of Research, Geojit Investments Limited, said "The RBI's MPC has maintained the status quo while marginally upgrading FY27 GDP growth projection, citing a resilient domestic economy. Additionally, annual inflation estimates were lowered, indicating the governor's open-minded approach, which suggested an optimistic view though further policy action would depend on data."
Nair mentioned that a rise in crude prices following renewed concerns over escalating tensions in West Asia, led Indian markets, which had opened strongly, to gradually move lower during the course of the session.
At the time of filing, Brent Crude rose 1.68 per cent to USD 80.69 per barrel, Gold gained 1.96 per cent to USD 4,157.64, and Crude Oil climbed 1.03 per cent to USD 76.55.
"Defying the broader market trend, realty and auto stocks outperformed on strong demand expectations ahead of the festive season and supportive financing conditions, while metal stocks gained on the back of an improved GDP growth outlook and robust domestic demand," Nair added.
The RBI on Wednesday struck an optimistic note on the domestic economy, raising its growth projection for 2026-27 while lowering its inflation forecast. Announcing the Monetary Policy Committee's decision to keep the policy repo rate unchanged at 5.25 per cent and retain a neutral stance, RBI Governor said the Indian economy has continued to display resilience even as the global environment remains volatile due to the West Asia conflict, trade tensions and fluctuating commodity prices.
Market analyst Vipin Dixena said, "Today's session reflected a cautious yet resilient undertone in the Indian equity market. While the benchmark indices witnessed intraday volatility amid the RBI's policy announcement, investors largely welcomed the central bank's balanced approach, which maintained macroeconomic stability without surprising the markets."
"The broader market remained relatively resilient, indicating that investor interest in domestic equities is still intact," Dixena added. "Until a decisive breakout above 24,650 resistance occurs, I expect the index to remain range-bound with stock-specific opportunities likely to outperform the broader market."
In international markets, Asian indices traded mostly higher, with the Nikkei 225 gaining 3.47 per cent to 66,258.00 and the KOSPI rising 3.63 per cent to 6,598.26.
GIFT NIFTY was up 0.30 per cent at 24,654.50, while Straits Times dipped 0.55 per cent to 5,581.37 and SET Composite slipped 0.46 per cent to 1,609.78.
On the currency front, the USD/INR pair fell 0.28 per cent to 95.1200.
— ANI
Reader Comments
SENSEX up by only 152 points after such positive commentary from RBI? Feels like the market is a bit tired. The West Asia tension is making everyone nervous about crude prices. Let's see how things unfold.
Interesting to see the Indian market's resilience against global headwinds. The GDP growth upgrade to FY27 is a strong signal. But I worry about crude at $80+ — that could derail the fiscal math.
Honestly, the neutral stance is a bit disappointing for those expecting a rate cut. Small business owners like us were hoping for cheaper loans. At least the GDP outlook is encouraging. 🙏
The NIFTY hovering around 24,624 right below the 24,650 resistance as the analyst mentioned. It's been a sideways market for weeks. Patience is key in such conditions, but auto and metal stocks are showing promise.
Good to see gold prices climbing too — my mother always says gold is the safest investment in uncertain times! 😄 But on a serious note, with crude rising due to West Asia tensions, prices at the pump will hurt the common man.
Respectfully, I think the RBI is being too cautious. Inflation
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