Rate-sensitive sectors rose on Wednesday, October 1 after RBI Monetary Policy Committee () kept the unchanged at 5.5 per cent and maintained the policy stance as “neutral” on Wednesday, October 1. This marks the second consecutive pause following three consecutive rate cuts worth 100 basis points across February, April and June.
The RBI Governor said that the central bank’s MPC unanimously decided to keep the repo rate unchanged at 5.5 per cent and the policy stance unchanged at neutral.
The RBI revised the average headline for financial year 2026 lower to 2.6% from 3.1% projected earlier. RBI Governor also announced that the Real GDP growth estimate for FY26 has been revised upward to 6.8 percent from the earlier projection of 6.5 percent, citing stronger-than-expected economic performance.
Following the policy announcement, Indian stock markets extended their upward momentum. The Sensex gained 306.67 points to reach the day’s high of 80,574.29. Meanwhile, the Nifty 50 rose 84.3 points to 24,695.40. However, broader market indices, including midcap and smallcap stocks, underperformed the benchmarks, adding just 0.08 percent and 0.15 percent, respectively.
“The MPC’s unanimous decision to hold the repo rate reflects a careful balance between sticky inflation risks and the need to support growth. With crude prices elevated, uneven monsoons, and global financial volatility, the RBI has chosen to stay cautious and data-driven. This pause signals policy stability ahead of the festive season, anchoring inflation expectations without choking credit growth.
For markets, the status quo was largely priced in, but the tone of vigilance suggests rate cuts are unlikely before late 2025 or even 2026. Bond yields may stay range-bound, while equities should take comfort in policy continuity. Rate-sensitive sectors like autos, real estate, and financials could benefit at the margin, but the real drivers for the next leg of the rally remain global liquidity trends and corporate earnings momentum,” said Sonam Srivastava, Founder and Fund Manager at Wright Research PMS.
Rate-Sensitive Sectors and Stocks
Banks and Financial Services Shine
The rate-sensitive sectors reacted strongly even as RBI kept repo rate unchanged. surged 0.7 per cent, while advanced by 0.75 percent each. Nifty Private Bank also surged 0.8 percent while Nifty Auto gained 0.5 percent and Nifty Realty added 0.4 percent.
Within the Nifty Bank index, gains came from only 4 stocks while the remaining traded in the red. ICICI Bank was the top gainer, up 1.63 percent followed by Kotak Bank, up 1.59 percent. Meanwhile, HDFC Bank and Axis Bank rose 0.95 percent and 0.17 percent. However, IDFC First Bank lost 1.7 percent, making it the top loser in the sector followed by Canara Bank and IndusInd Bank, down over 1 percent each. Federal Bank, SBI, Bank of Batoda and Punjab National Bank also shed over 0.5 percent each.
In the financial services space, REC led the rally with a 2.8 percent increase followed by PFC, which added 2.4 percent. Shriram Finance also rose 1.5 percent. Meanwhile, BSE, Muthoot Finance, LIC Housing Finance, and Jio Financial Services also rose 0.5 percent each. However, SBI Card was the top loser, down 2.5 percent followed by Chola Finance and Bajaj Finance, down over 1 percent each.
Strong Performance By Auto & Realty Sectors
Tata Motors led the charge within the pack, with almost 3 per cent gains followed by M&M, which rose 2 percent. Uno Mnda, Exide Industries, Eicher Motors, and TVS Motor were also in the positive in intra-day deals. However, Bharat Forge, Maruti, TI India, Hero MotoCorp, and shok Leyland lost over half a percent each.
In the , Godrej Properties emerged as top gainer, rising around 2 percent, while Prestige, DLF, Lodha, and Oberoi Realty also gave positive returns. However, Anant Raj, Signature Global, Sobha, and Phoenix were in the red.
“With the RBI maintaining the repo rate at 5.5% for the second consecutive time, monetary policy continues to support stability amidst external trade frictions and fast changing global economic narrative. This pause, along with the Central bank’s ‘neutral’ stance, reflects cautious optimism which factors in the resilient domestic economy and moderating inflation levels. The Central Bank has consequently revised the GDP growth projection upwards by 30 basis points to 6.8% for FY 2025-26.
Banks are yet to fully transmit the earlier 100 basis points repo rate reduction and is expected to be completed soon in the ongoing festive season. This is expected to benefit the real estate sector, especially homebuyers in the affordable and mid-income segments. Additionally, the recent GST rationalization in key construction materials such as cement can allow room for developers to lower prices and offer lucrative deals to push housing sales. Overall, timely GST rationalization, stable financing costs and festive discounts augur well for real estate, especially housing, warehousing, retail and hospitality demand,” said Vimal Nadar, National Director and Head of Research, Colliers India.
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