Stock markets rally as RBI cuts interest rate; Sensex jumps 447 points

Core Insights - The Reserve Bank of India (RBI) cut the repo rate by 25 basis points to 5.25%, marking the first rate cut in six months, which positively impacted the stock market [1][2][5] - The RBI revised its GDP growth forecast for FY26 to 7.3% from 6.8% and lowered its inflation forecast to 2% from 2.6%, indicating a more optimistic economic outlook [3][5][7] Stock Market Performance - The BSE Sensex rose by 447.05 points (0.52%) to close at 85,712.37, while the NSE Nifty increased by 152.70 points (0.59%) to 26,186.45 [1][2] - The BSE midcap index increased by 0.21%, while the smallcap index decreased by 0.67% [5] Sector Performance - Rate-sensitive sectors such as banking, auto, and real estate saw significant gains due to the rate cut, with major winners including State Bank of India, Bajaj Finserv, and Infosys [3][4][7] - Conversely, sectors like services, capital goods, industrials, and FMCG lagged behind [6] Investor Sentiment - Investor sentiment improved significantly following the RBI's unexpected rate cut, leading to a risk-on attitude in the equity markets [5][7] - Foreign Institutional Investors (FIIs) sold equities worth ₹1,944.19 crore, while Domestic Institutional Investors (DIIs) purchased stocks worth ₹3,661.05 crore [8]