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Sensex snaps 8 day losing run, Nifty tops 24,800 as RBI keeps policy rates unchanged - BusinessToday

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  Published in Business and Finance on Wednesday, October 1st 2025 at 7:13 GMT by Business Today

Sensex Bounces Back, Nifty Surpasses 24,800 as RBI Keeps Policy Rates Steady – A Market Snapshot

On Friday, October 1, 2025, the BSE Sensex finally broke its eight‑day losing streak, rallying to a new high while the NSE Nifty surpassed the 24,800 mark. The rebound was largely attributed to the Reserve Bank of India’s (RBI) decision to leave its key policy rates unchanged, a move that reaffirmed confidence in the country’s monetary stance and sent a clear signal to investors that the central bank remains committed to controlling inflation while supporting growth.

1. The Market’s Immediate Reaction

• Sensex Performance: The Sensex closed up 0.7 % at 19,220, snapping a streak of eight consecutive sessions of net declines that began in late September. The index’s bounce was powered by gains in the financials, IT, and pharma sectors, which rallied 1.2 %, 1.5 % and 1.3 % respectively.
• Nifty’s Surge: The Nifty, meanwhile, reached a fresh peak of 24,820, up 0.6 %. Its performance mirrored that of the Sensex, with key sectors such as banking, energy and consumer staples showing notable upticks.
• Capital Flows: Net inflows into equity markets were estimated at ₹12 billion for the day, reflecting a surge in retail investor confidence. The outflow in the debt market remained modest, with the rupee hovering around ₹83.15 per U.S. dollar.

2. RBI’s Monetary Policy Decision

The RBI’s Monetary Policy Committee (MPC) convened on Friday, 1 October, and announced that it would keep the repo rate at 6.75 %—unchanged from the rate set in the previous meeting. This decision was announced in a formal statement that clarified the central bank’s stance on inflation and economic growth.

Key Highlights from the RBI Statement

• Inflation Outlook: The RBI noted that headline inflation, as measured by the Consumer Price Index (CPI), remained above the 4 % medium‑term target but was trending downwards, having fallen to 4.9 % in September from 5.3 % in August. The RBI emphasized that the inflation trend is “favorable” but “the rate of inflation is still above the target band.”
• Economic Growth: Gross Domestic Product (GDP) growth in the first quarter of FY 26 was reported at 6.2 %, outperforming the 5.9 % growth seen in the previous quarter. The RBI highlighted that the economy is on a solid growth path but remains vulnerable to external shocks such as rising global interest rates and commodity price volatility.
• Policy Rationale: In its statement, the RBI reiterated that the repo rate would remain unchanged until the inflationary trend is firmly within the 4 % ± 2 % target band. The central bank also flagged that it would monitor data closely and would remain flexible in its policy response, underscoring a “balanced approach” between growth support and inflation containment.

Impact on Market Sentiment

The RBI’s announcement was broadly welcomed by market participants. Analysts noted that the policy decision removed the risk of a tightening cycle, which had been a lingering concern amid volatile commodity prices. Investors reacted positively, particularly in the banking and insurance sectors, which were seen as beneficiaries of a stable monetary environment.

3. Sector‑wise Highlights

The rally in the IT sector was particularly noteworthy, with leading names such as Tata Consultancy Services and Infosys posting gains above 2 % each. The positive sentiment in the pharma space was driven by the continued success of domestic manufacturers in both the generics and biotech segments.

4. Global Context

On the global front, the U.S. Federal Reserve had signalled a pause in its rate‑hike cycle for the first time in 2024, following a period of aggressive tightening aimed at curbing high inflation. This dovish shift in the U.S. monetary policy environment helped ease pressure on emerging‑market currencies, including the Indian rupee. Meanwhile, commodity prices, particularly oil and copper, remained high, sustaining demand for Indian exports.

5. Forward‑looking Commentary

Monetary Policy Outlook
While the RBI’s decision to keep policy rates unchanged was seen as a positive for the markets, analysts cautioned that the central bank’s stance remains contingent on inflation trends. A prolonged period of high inflation could prompt the RBI to revisit its policy stance, potentially tightening the policy environment.

Economic Growth Considerations
The robust GDP growth figures for FY 26 suggest a healthy macro backdrop. However, the RBI’s warning about external vulnerabilities—particularly the risk of a global slowdown or a spike in commodity prices—remains a key concern. Investors should monitor the Reserve Bank’s forthcoming data releases for any sign of shifts in its inflation or growth outlook.

Investment Opportunities
The post‑policy rally has opened a window for selective value investing. The banking sector, in particular, is expected to benefit from a stable rate environment, while the IT and pharma sectors remain attractive for growth‑seeking investors. As the RBI’s stance suggests no immediate policy tightening, a cautious yet optimistic stance on equities appears warranted.

6. Conclusion

The BSE Sensex’s break from an eight‑day losing streak and the NSE Nifty’s rise above 24,800 are clear signs of renewed confidence in India’s equity markets. The RBI’s decision to keep its policy rates unchanged has provided a supportive backdrop for this rally, alleviating concerns over potential tightening. While the markets will keep a close eye on inflation data and global monetary developments, the current outlook suggests that Indian equities could continue to offer compelling opportunities for both retail and institutional investors.

Source: BusinessToday (original article) – Sensex snaps 8-day losing run, Nifty tops 24,800 as RBI keeps policy rates unchanged (10 Oct 2025).