Stock Market Today: Sensex up by 500 pts after RBI holds rate; See where to invest now

Trading remained subdued, with the Nifty moving within a 140-point range and the Sensex within 500 points. This upward movement was driven by investor optimism and buying interest across various sectors.

New Delhi: Indian equity markets on October 1 surged as the Reserve Bank of India (RBI) decided to maintain the repo rate at 5.5%, signaling confidence in the economy's resilience. The benchmark indices, Sensex and Nifty 50 experienced significant gains following the announcement.

The BSE Sensex climbed over 500 points, reaching a day's high of 80,434.75, while the NSE Nifty 50 rose by 0.18% to 24,652.7. This upward movement was driven by investor optimism and buying interest across various sectors.

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Sectoral Performance

The rally was led by rate-sensitive industries like banking, financial services, and real estate. With stocks like Kotak Mahindra Bank and ICICI Bank rising more than 1%, the Nifty Bank index jumped by 0.70%. Positive momentum was also seen in the auto industry, as evidenced by the 0.54% increase in the Nifty Auto index. On the other hand, early trade indicated some pressure on the metal and IT sectors.

RBI's Economic Outlook and Policy Position

The Monetary Policy Committee unanimously agreed to maintain the repo rate at 5.5% and the policy stance as "neutral," according to RBI Governor Sanjay Malhotra. Citing better-than-expected economic performance, the central bank updated its estimate of FY26 GDP growth from 6.5% to 6.8%.

Additionally, the average headline inflation forecast for FY26 was lowered to 2.6% from 3.1% previously. Investors, especially those in rate-sensitive industries, applauded the RBI's decision to keep interest rates unchanged.

Experts caution that global factors like the ongoing US government shutdown and changes in commodity prices could affect the market's response.

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RBI's decision for full implementation of previous measures

The RBI's decision to permit the full implementation of previous measures was supported by the policy decision, which was consistent with market expectations.

Before making any further changes, the RBI also seems to be taking a wait-and-watch stance, carefully evaluating developments in the world and in relation to tariffs. Additionally, the average headline inflation forecast for FY26 was lowered to 2.6% from 3.1% previously.

The Sensex saw some volatility during the day, falling from its peak but continuing on its upward trajectory. It is recommended that investors keep up with world events and the RBI's upcoming policy initiatives.

(This news story is intended for educational purposes only. Readers should consult a qualified financial advisor or expert before making any investment decisions.)