RBI Policy: Realty, Auto Outperform As Reserve Bank Of India Maintains Status Quo On Rates

The Reserve Bank of India (RBI) on August 5 kept the repo rate unchanged at 5.25 per cent, in line with market expectations, while retaining its neutral policy stance. The Monetary Policy Committee (MPC) unanimously voted in favour of the status quo.

RBI Governor Sanjay Malhotra said the ongoing conflict in West Asia continues to disrupt key trade routes and pose risks to the global economy. Despite these headwinds, the RBI raised its FY27 real gross domestic product (GDP) growth forecast by 10 basis points to 6.7 per cent, citing stronger-than-expected economic activity in the April-June quarter. However, he cautioned that inflation is likely to peak in the September quarter, driven largely by food and fuel prices, while a deficient monsoon remains a key risk to the outlook.

Realty, Auto Lead Gains As Markets Welcome Growth Upgrade

The RBI policy announcement drew a positive response from the equity market. At 11:05 AM, the BSE Sensex was up 0.60 per cent at 78,894.57, while the NSE Nifty 50 traded marginally higher by 0.17 per cent at 24,656.60. Buying was visible across most sectors, with 11 of the 16 major NSE sectoral indices trading in the green.

Rate-sensitive sectors outperformed after the policy announcement. The Nifty Realty index rose around 2.40 per cent, while the Nifty Auto index gained about 1.50 per cent. Banking and financial stocks, however, traded with limited gains as investors assessed the RBI's commentary on inflation and growth.