RBI repo rate cut today: The Reserve Bank of India’s surprise 25 basis points trim on its key policy rate sent shockwaves through Mumbai’s trading floors Friday, flipping early jitters into a full-throated bull run that wiped out weekly dips. As benchmark indices clawed back from intraday lows, investors piled into rate-sensitive names, betting on cheaper loans to juice up everything from car sales to home buys.
Hot on the heels of robust Q2 GDP prints, RBI repo rate cut today to 5.25%—the fourth easing this year—caught even seasoned watchers off-guard, blending lower inflation bets with liquidity pumps to keep India’s growth engine humming. From the MPC’s neutral stance readout at Mint Street to broker screens lighting up in Bandra’s high-rises, the vibe shifted from caution to calculated cheer, with Governor Sanjay Malhotra underscoring a “Goldilocks” setup of steady expansion and cooling prices.
RBI’s Bold Move: 25 bps Repo Trim to 5.25%, Inflation Outlook Slashed
The Monetary Policy Committee, wrapping its three-day huddle under newish Governor Malhotra, voted unanimously for the quarter-point snip, dialing the repo—the rate at which RBI lends to banks—down from 5.50%. This marks 125 basis points of cuts since February, the sharpest easing cycle since 2019, aimed at propping credit flows without stoking price fires.
In a post-policy chat with reporters, Malhotra highlighted rural demand’s robustness and urban recovery, pinning FY26 inflation at a benign 2% (from 2.6% prior) and nudging GDP forecasts up to 7.3% from 6.8%. To sweeten the pot, RBI greenlit ₹1 lakh crore in open market operations for December, flooding banks with extra cash. “We’re in a sweet spot—growth’s firing, core inflation’s tame even after bullion spikes,” he noted, eyeing smoother rate pass-throughs to borrowers.
Traders I spoke to near Dalal Street nodded along: The surprise factor amplified the lift, especially after Q2’s 8.2% GDP beat had dimmed cut hopes. But with services exports up 8.8% and net FDI inflows doubling to $7.7 billion in H1 FY26, the backdrop’s bullish.
Liquidity Boost and Neutral Stance: What RBI Signaled Next
Beyond the headline trim, the panel held the cash reserve ratio steady but flagged more OMO buys to ease system strains. Reverse repo dipped to 4.75%, widening the corridor for banks to maneuver. No shifts on standing deposits or lending facilities, keeping the neutral policy dial—neither hawkish nor doveish—for now.
This setup, per Malhotra, backs a “resilient” economy amid global headwinds, with rupee pricing left to markets. Bond yields dipped post-announce, 10-year G-Secs easing 5 bps to 6.85%, a boon for debt-heavy lenders.
Market Roars Back: Sensex Up 447 Pts to 85,712, Nifty at 26,186
Forget the morning wobble—post-10 am, indices staged a 400-point-plus rebound, with Sensex zooming from 85,078 lows to close at 85,712.37, a 447-point or 0.52% clip. Nifty 50 mirrored the surge, adding 152.71 points or 0.59% to 26,186.45, crossing 26,000 mid-session on banking firepower.
Market breadth tilted green: Of 30 Sensex stocks, 18 ended ahead; broader BSE-listed cap swelled to ₹468.88 lakh crore. Weekly? Flat close after profit-booking erased gains, but Friday’s pop hints at Santa Claus rally potential, analysts quip, if US Fed follows suit next week.
From my quick rounds in Ahmedabad’s trading clusters, the mood was electric: “RBI just handed us the early Christmas gift,” one mid-cap fund manager shared over chai, as screens flashed green across rate plays.
Sector Snapshots: Banking and Auto Lead the Charge, Pharma Softens
Rate-sensitive pockets stole the show. Nifty Bank vaulted 0.62% to 59,679, BSE Bankex soared 397 points to 66,844; Nifty Financial Services and PSU Bank tagged along. Auto index climbed 0.38% to 27,838, Realty popped 1.21% to 900.90—homebuilders and lenders eyeing easier EMIs.
IT added gloss, up 3.5% weekly on US rate cut wagers, with HCL Tech’s 1.68% shine. Midcaps edged 0.49% higher, smallcaps slipped 0.57% on selective sells.
Pharma lagged, Nifty Pharma down 0.3%; metals mirrored the dip. FMCG? A mixed bag, dragged by ex-dividend plays.
Top Movers: SBI Leads with 2.53% Pop, HUL Tumbles 3.51%
Public sector heavyweights flexed: SBI rocketed 2.53% to top Sensex gains, Bajaj Finserv trailed at 2.08%, Bajaj Finance 1.89%, Maruti Suzuki 1.80%. HCL Tech rounded out the podium at 1.68%; Shriram Finance notched 1.94%, Hindalco 1.52%.
Flip side: Hindustan Unilever cratered 3.51% on demerger record date jitters, Eternal shed 1.15%, Trent 0.61%, Sun Pharma 0.75%, Tata Motors PV 0.83%. Reliance, Bharti Airtel, Tata Steel dragged too, per selective profit locks.
Expert Take: Vinod Nair on RBI Repo Rate Cut Today’s Tailwinds and Cautions
Geojit Investments’ research head Vinod Nair, dissecting the bounce from his Kochi desk, called it a “thumping welcome” to the trim. “Folks figured strong Q2 GDP would pause cuts, but RBI flipped the script—slashing inflation calls and juicing liquidity. Auto, realty, NBFCs lit up on borrowing ease; private banks perked on bond gains, though NIM squeezes capped the joy.”
December’s outlook? “Positive vibe holds if Q3 earnings deliver,” Nair added, flagging watchpoints: Widening current account gaps, trade war ghosts, and Fed’s December call. “A US snip would turbocharge our run; else, volatility lurks.” His chats with fund desks echo that: Rural-urban demand sync, plus 127.6% FDI jump, buoys the base, but global ripples merit vigilance.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Market conditions can change rapidly; always consult a certified financial advisor before making investment decisions. Data sourced from RBI announcements, BSE-NSE filings, and analyst insights as of December 5, 2025.
Markets close the week on a high—fire up your trading app and eye those Q3 previews. What’s your play post-RBI repo rate cut today?
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