Sensex Surges 680 Points After RBI Rate Cut: Banking Stocks Rally, Nifty Touches New High

Indian stock markets surged sharply after the Reserve Bank of India cut the repo rate by 25 basis points to 6.25%, with the Sensex gaining 680 points and the Nifty crossing 22,500 for the first time, led by banking and real estate stocks.

Representative image. Photo: Nationalism News

The BSE Sensex surged 680 points or 0.93% on Tuesday to close at a record 74,320, while the NSE Nifty 50 gained 198 points to 22,518, after the Reserve Bank of India cut the repo rate by 25 basis points to 6.25% in its first monetary policy decision of FY2026-27. The rally was broad-based, with all 30 Sensex constituents closing in the green.

Banking stocks led the charge. HDFC Bank gained 4.2%, SBI surged 3.8%, Axis Bank advanced 3.1% and ICICI Bank rose 2.7%. The Nifty Bank index jumped 2.9% to a new lifetime high of 49,800. Real estate stocks also jumped sharply, with DLF rising 5.4% and Godrej Properties gaining 4.8%, on expectations of lower home loan rates.

The midcap index gained 2.1% while the small-cap index surged 3.4%, outperforming the headline indices. Market breadth was extremely positive, with 2,180 stocks advancing and only 420 declining on the BSE. Total traded volume was Rs 1.12 lakh crore, the second highest in history.

Foreign institutional investors (FIIs) turned net buyers, purchasing Rs 3,400 crore worth of shares, reversing a three-week selling trend. Domestic institutional investors (DIIs) also bought Rs 1,200 crore. The Indian rupee strengthened 28 paise against the US dollar to 83.14.

Market experts say the rate cut cycle is likely to continue. 'We expect two more cuts of 25 bps each in the June and August MPC meetings, taking the repo rate to 5.75% by end of FY27. This is extremely positive for rate-sensitive sectors like banking, housing and auto,' said Nilesh Shah, Managing Director of Kotak Mahindra AMC.