Stock Market Today: Sensex, Nifty Ends Lower For Third Day Amid RBI's 25 Bps Rate Cut
Stock Market Today: While the monetary policy committee reduced the repo rate to 6.25 per cent as expected, volatility remained in the market
The Indian benchmark indices, Sensex and Nifty closed lower on Friday, after fluctuating between gains and losses throughout the session, following the Reserve Bank of India’s (RBI) much-anticipated 25-basis-point rate cut—the first in almost five years.
While the monetary policy committee reduced the repo rate to 6.25 per cent as expected, volatility remained in the market. Financials, FMCG, and IT stocks led the Nifty’s decline, while telecom, metals, and auto sectors saw gains.
At the close, the Sensex dropped 197 points, or 0.3 per cent, to 77,860, while the Nifty fell 43 points, or 0.2 per cent, to 23,559. A total of 1,468 shares advanced, 2,293 declined, and 139 remained unchanged.
“The rate cut is a good decision, but FIIs are back to selling. Market participants know there's limited potential for a sustained rally, so shorting happens at higher levels," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. Foreign institutional investors (FIIs) have already offloaded Rs 9,709 crore worth of Indian shares in February.
The banking sector faced challenges as the RBI's monetary policy did not include further liquidity-easing measures. ICICI Bank and SBI led the losses, causing the Nifty Bank index to drop by 0.5 per cent.
"Banking will rebound only when FIIs turn buyers, which will take time. As long as FIIs keep selling, banking stocks will remain under pressure. Autos, on the other hand, are strong because the budget has boosted discretionary consumption. Realty should do well after the rate cut, but we aren’t seeing a sharp reaction yet. The market response will take time—the bigger concern remains FIIs,” added Vijayakumar.
Broader Market
The broader markets showed mixed results, with the BSE Midcap index remaining flat while the BSE Smallcap index fell 0.7 per cent. Among the 13 major sectoral indices, only four ended in the green.
Sectorial Update
The Nifty Metal index surged by 2.5 per cent, driven by optimism surrounding increased infrastructure and real estate activity. The anticipated impact of a lower repo rate on infrastructure and housing demand, both key consumers of metals, boosted metal stocks. As a result, companies like JSW Steel, Tata Steel, Jindal Steel, and Welspun Corp saw their shares rise by 3–7 per cent.
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