The Indian stock market demonstrated notable resilience this week, ending on a positive note despite global headwinds including escalating tariff tensions and geopolitical concerns, analysts said on Saturday.
After a largely range-bound performance early in the week, benchmark indices saw a sharp uptrend on Friday. The Nifty closed at 25,003, while the Sensex settled at 82,118.99—both near their weekly highs. Overall, the market posted nearly a 1% gain for the week, supported by robust domestic cues.
RBI’s Bold Policy Move Surprises Markets
The highlight of the week was the Reserve Bank of India’s unexpected monetary policy decision. In a bold and growth-oriented move, the RBI slashed the repo rate by 50 basis points and reduced the cash reserve ratio (CRR) by 100 basis points—more than market expectations. Additionally, the central bank shifted its policy stance from ‘accommodative’ to ‘neutral’, signaling a quicker-than-expected policy pivot.
“This front-loaded easing indicates the RBI’s strong commitment to reviving growth amidst global uncertainty,” said Ajit Mishra, SVP, Research, Religare Broking Ltd. “The decisive action reinforces investor confidence in the central bank’s ability to manage inflation while supporting recovery.”
Sectoral Gains Led by Rate-Sensitive Stocks
Rate-sensitive sectors led the rally, with real estate, automobile, and banking stocks seeing strong buying interest. Financials and NBFCs also saw gains, buoyed by expectations of improved borrowing conditions and credit demand due to lower interest rates.
However, IT stocks lagged, weighed down by ongoing macroeconomic concerns in key markets, such as the US and Europe. Mid-cap and small-cap indices outperformed their large-cap counterparts, delivering weekly gains of between 2.8% and 4%, reflecting a heightened risk appetite among investors.
Supportive Macros Add Momentum
Vinod Nair, Head of Research at Geojit Financial Services, highlighted a combination of strong macroeconomic indicators—such as robust Q4 GDP growth, healthy GST collections, and a promising monsoon—as key drivers of investor optimism. “Domestically focused and interest-sensitive sectors like financials, real estate, FMCG, and retail attracted strong institutional flows,” he said.
Profit booking was seen in pockets during the week, but overall sentiment remained constructive. Attractive valuations and solid earnings momentum supported the outperformance of mid- and small-cap stocks.
Outlook: Focus Shifts to Macroeconomic Data
Looking ahead, markets will closely monitor upcoming macroeconomic data, particularly the CPI inflation print, for cues on demand trends and further policy actions. While concerns remain over global issues such as China’s rare earth export restrictions and U.S. inflation, analysts believe the RBI’s aggressive rate cut, combined with a stable GDP outlook and cooling inflation, will help sustain investor confidence.
—IANS
