Markets Rebound Late, Sensex Finishes Higher as RBI Stays Put on Interest Rates

The BSE Sensex recovered from a sharp intraday fall to close 152.05 points, or 0.19 per cent, higher at 78,581 on Wednesday after the Reserve Bank of India (RBI) kept the repo rate unchanged at 5.25 per cent for the fourth consecutive monetary policy review. The NSE Nifty also ended marginally higher, gaining 9.75 points to settle at 24,624.65, as investors balanced the RBI's policy decision with global market cues.

Trading remained highly volatile throughout the session. The Sensex climbed to an intraday high of 79,055.38 before heavy selling erased gains and dragged the index to a low of 78,285.74, nearly 770 points below the day's peak. However, strong buying in banking, automobile and capital goods stocks during the closing hours helped the benchmark rebound into positive territory.

Market volatility has remained elevated since Monday following the introduction of the Closing Auction Session (CAS) for stocks with futures and options (F&O) contracts. The new auction mechanism is aimed at making the closing price discovery process more transparent and robust.

The RBI's Monetary Policy Committee (MPC), headed by Governor Sanjay Malhotra, unanimously retained its neutral stance while keeping policy rates unchanged. The central bank also raised its FY27 GDP growth forecast to 6.7 per cent from 6.6 per cent, citing resilient domestic demand, healthy manufacturing and services activity, and strong exports despite uncertainties arising from the West Asia conflict and global trade tensions. It also lowered its inflation estimates, reflecting confidence that price pressures remain manageable.

Among the top gainers were UltraTech Cement, NTPC, State Bank of India, Mahindra & Mahindra, InterGlobe Aviation and Kotak Mahindra Bank, while Tata Consultancy Services, HCL Tech, Reliance Industries and Bharat Electronics ended lower. Foreign Institutional Investors (FIIs) remained net buyers, purchasing equities worth Rs 2,446.47 crore on Tuesday. Meanwhile, Brent crude rose 1.75 per cent to USD 80.75 per barrel, while positive global market trends supported investor sentiment.