Rate-Sensitive Bank, Auto, Realty Stocks end Higher

Rate-sensitive stocks -- bank, auto and realty -- rallied on Wednesday after the Reserve Bank of India expectedly left its key interest rates unchanged as it waited for greater clarity on the impact of US tariffs as well as the rollout of earlier rate cuts and recent tax reductions.

RBI Governor Sanjay Malhotra, however, signalled scope for easing in the coming months to support the economy from any possible hit from the US tariffs.

Among bank stocks, Kotak Mahindra Bank climbed 3.45%, Axis Bank went up by 2.43%, Yes Bank (2.40%), ICICI Bank (1.77%), HDFC Bank (1.48%), IndusInd Bank (1.11%), Bank of Baroda (0.46%) and Federal Bank (0.36%).

The BSE Bankex index jumped 1.44% to 62,401.58.

"After having fallen for the past eight trading sessions, a relief rally came to the fore, backed by factors like an upsurge in banking stocks, positive global cues, and appreciation in the rupee. Although the repo rate was unchanged, the RBI's governor's optimism with regards to softening inflation and upgrading the growth prospectus for FY26 boosted investors' sentiment," Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, said.

From auto counters, Tata Motors surged 5.54%, MRF went up by 2.14%, Mahindra & Mahindra (1.26%), TVS Motor Company (0.61%), Sona BLW Precision Forgings (0.47%) and Samvardhana Motherson International (0.40%).

The auto index rallied 0.74% to 59,694.84.

"Investor sentiment was lifted after the RBI maintained its pause on interest rates, reinforcing expectations of steady liquidity and policy stability in the near term. This gave a boost to rate-sensitive sectors, particularly financials," Vikram Kasat, Head Advisory at PL Capital, said.

From the realty pack, Godrej Properties rallied 3.23%, Prestige Estates Projects climbed 2.04%, DLF (1.30%), Oberoi Realty (0.60%), Lodha Developers (0.49%), The Phoenix Mills (0.43%), and Anant Raj Ltd (0.09%).

The realty index climbed 1.11% to 6,815.23.

"Indian equity markets staged a strong rebound after eight consecutive sessions of decline, with the Nifty-50 closing 225 points higher at 24,836. Banking and financial stocks led the upmove, supported by the RBI's dovish stance that hinted at future rate cuts.

"In its policy outcome today, the RBI kept the benchmark repo rate unchanged at 5.5% for the second consecutive meeting, while announcing a set of reforms to enhance bank lending," Siddhartha Khemka, Head of Research - Wealth Management at Motilal Oswal Financial Services Ltd, said.

The 30-share BSE Sensex jumped 715.69 points or 0.89% to settle at 80,983.31. The 50-share NSE Nifty climbed 225.20 points or 0.92% to 24,836.30.

"The Indian equity market posted a broad-based rally today, with the RBI's policy decision broadly in line with expectations but accompanied by a more constructive tone than in June, which buoyed investor sentiment.

"Its dovish stance, alongside an upward revision of India's GDP growth forecast from 6.5% to 6.8%, reinforced confidence," Vinod Nair, Head of Research at Geojit Investments Limited, said.