Stock Markets Hold on to Gains Post RBI Policy, Measures to Support Rupee

• The 30-share BSE Sensex climbed 269.93 points to 74,629.94 in opening trade.

• Later, the BSE benchmark traded 105.04 points higher at 74,465.05, and the Nifty quoted 25 points up at 23,443.50.

• Bajaj Finance, Hindustan Unilever, Adani Ports, Eternal, Axis Bank and Mahindra & Mahindra were among the biggest gainers.

Benchmark indices Sensex and Nifty quoted higher on Friday afternoon after the Reserve Bank of India (RBI) kept its benchmark repo rate unchanged at 5.25%, and announced a raft of measures to attract foreign capital and support the rupee.

The 30-share BSE Sensex climbed 269.93 points to 74,629.94 in opening trade. The 50-share NSE Nifty went up by 62.4 points to 23,478.95.

Later, the BSE benchmark traded 105.04 points higher at 74,465.05, and the Nifty quoted 25 points up at 23,443.50.

The RBI on Friday kept its benchmark repo rate unchanged at 5.25%, as expected, and announced a raft of measures to attract foreign capital and support the rupee amid growing risks to growth and inflation from the prolonged West Asia conflict, elevated energy prices and global supply-chain disruptions.

To support the rupee, the measures included scrapping taxes on interest income and capital gains for eligible foreign investors in government securities, offering concessional terms for foreign-currency deposits from non-resident Indians and subsidising hedging costs for select offshore borrowings.

The Monetary Policy Committee (MPC) unanimously voted to leave the policy repo rate unchanged at 5.25%, and continue with its "neutral" stance.

From the 30-Sensex firms, Bajaj Finance, Hindustan Unilever, Adani Ports, Eternal, Axis Bank and Mahindra & Mahindra were among the biggest gainers.

Trent, Tata Steel, HCL Tech and InterGlobe Aviation were among the laggards.

The government said it would scrap taxes on interest income and capital gains for eligible foreign investors in government securities from April 1, 2026, while the RBI broadened the universe of sovereign bonds available under its unrestricted foreign investment route.

The central bank also announced concessional forex swaps for state-run firms raising overseas debt and said it would bear hedging costs on fresh three-to five-year FCNR(B) deposits until September 30 to attract dollar inflows from non-resident Indians.

Together, the measures are aimed at shoring up the rupee which has plunged over 6% this year on war-driven surge in crude prices and record foreign fund outflows.

Alongside the policy decision, the RBI and the Government announced a broad package of measures to attract foreign capital and support the Indian Rupee amid persistent FPI outflows, Amar Ambani, Executive Director and Head Institutional Equities Research, YES Securities, said.

"Today’s RBI policy reflects a dual-track strategy of maintaining monetary stability while actively defending the rupee through targeted capital flow incentives. By holding the repo rate steady at 5.25% and retaining a neutral stance, the MPC has prioritised growth and inflation balance, even as it raised inflation projection to 5.1% and trimmed growth outlook to 6.6%," Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

Brent crude, the global oil benchmark, traded at around $95 per barrel.

Commenting on the MPC decisions, Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank said, "RBI expectedly kept the rate and stance unchanged, while highlighting the amplified risks on the inflation front. We expect 50bp of rate hike beginning in October. On the positive side, the measures taken by the RBI to attract capital would help ease pressure on the INR." In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index traded lower.

US markets ended mostly higher on Thursday.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹4,447.06 crore on Thursday, according to exchange data.

On Thursday, the Sensex went up marginally by 13.84 points, or 0.02%, to settle at 74,360.01. The Nifty eked out a marginal gain of 10.95 points, or 0.05%, to end at 23,416.55.