Stock market benchmark indices Sensex and Nifty rose on Friday (December 5, 2025) after the Reserve Bank of India (RBI) cut key benchmark interest rates for the first time in six months and stepped in to boost liquidity to support the “Goldilocks” economy in the face of higher US tariffs.
Gaining for the second consecutive day, the 30-share BSE Sensex closed 447.05 points or 0.52% higher at 85,712.37. During the day it jumped 531.4 points or 0.62% to 85,796.72.
The 50-share NSE Nifty rose 152.70 points, or 0.59%, to 26,186.45.
On the weekly front, the BSE benchmark gained a marginal 5.7 points, while the Nifty fell 16.5 points.
The six-member monetary policy committee led by RBI Governor Sanjay Malhotra voted unanimously to reduce the repurchase or repo rate by 25 basis points to 5.25% and maintained the neutral stance, giving scope for further rate cuts.
By doing so, the RBI has ignored concerns over the fall in the rupee, which has crossed the 90-mark against the dollar this week.
The RBI cut its inflation forecast for the fiscal year till March to 2% from 2.6%, while raising the GDP growth forecast to 7.3% from the previous estimate of 6.8%.
Among the Sensex companies, State Bank of India, Bajaj Finserv, Bajaj Finance, Maruti, HCL Tech, Larsen & Toubro, Mahindra & Mahindra and Infosys were among the major winners.
However, Hindustan Unilever, Eternal, Tata Motors Passenger Vehicles and Sun Pharma were among the laggards.
Rate-sensitive stocks – banks, auto and realty – closed higher.
“Investor sentiment got a big boost after the Reserve Bank of India (RBI) cut repo rate by 25 bps and raised FY2026 GDP forecast to 7.3% from 6.8%, which eased concerns over tariff-related pressure on domestic growth, leading to a rise in equity markets,” said Ponmudi R, CEO of online trading and wealth tech firm Enrich Money.
The BSE midcap gauge rose 0.21%, while the smallcap index fell 0.67%.
Among sectoral indices, BSE Focused IT jumped 0.90%, Bankex (0.86%), Financial Services (0.84%), Metals (0.74%) and Tech (0.73%) jumped.
However, BSE Services, Capital Goods, Industrials and FMCG were laggards.
Vinod Nair, Head of Research, Geojit Investments Ltd. said, “Indian markets have responded enthusiastically to RBI’s unexpected 25 bps rate cut, which seemed impossible given the strong Q2 GDP data. This surprise, coupled with sharply lower inflation forecasts and supportive liquidity measures, has created a risk-off sentiment in equities. Rate-sensitive sectors like auto, real estate and NBFCs led gains due to reduction in costs. Are.”
According to exchange data, foreign institutional investors (FIIs) sold equities worth ₹1,944.19 crore on Thursday, while domestic institutional investors (DIIs) bought stocks worth ₹3,661.05 crore.
In Asian markets, South Korea’s Kospi, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index closed in positive territory, while Japan’s Nikkei 225 index closed lower.
European markets were trading higher. American markets closed flat on Thursday.
Global oil benchmark Brent crude rose 0.16% to $63.36 a barrel.
On Thursday, the Sensex closed 158.51 points or 0.19% higher at 85,265.32. Nifty rose 47.75 points or 0.18% to 26,033.75.
published – December 05, 2025 05:13 PM IST
