Stock Market Update: Nifty Bank Rallies Over 700 Points as RBI Policy Boosts Sentiment

Indian equity markets witnessed a strong rebound on Wednesday, led by banking stocks, after the Reserve Bank of India (RBI) announced its latest monetary policy outcome. Although the central bank kept the repo rate unchanged, several internal measures were introduced to strengthen the banking system and ease the lending process.

The Nifty Bank index surged 712 points to close at 55,347, marking a massive upside. Meanwhile, the Nifty 50 rose 225 points, while the Sensex added 715 points. Midcap and small-cap stocks also saw healthy buying interest, contributing to the overall positive market mood.

Market breadth was largely positive, with more than 2,000 advancing stocks against only 800 declines, reflecting broad-based participation. The rally gained further momentum post-RBI’s announcement, as investors cheered the balanced stance on inflation and lending reforms.

Key Market Highlights

RBI Policy Impact:
No change in repo rate, but the central bank revised its inflation forecast lower from 3.1% to 2.6% and issued directives aimed at strengthening banks. This boosted investor sentiment across financial stocks.
FII-DII Data:
Provisional data showed FII outflows worth ₹1,545 crore, while DIIs bought shares worth ₹2,862 crore, leading to net inflows of nearly ₹1,300 crore into the equity market.
Advance-Decline Ratio:
Over 2,000 stocks advanced against 800 declines, indicating a strong bullish undertone.
Top Gainers:
Sun TV (+15%), Network18 (+11.5%), AIA Engineering (+6.5%), and Tata Motors (+5.5%). Most of the strong performers were from the midcap and small-cap space.
Top Losers:
Delhivery (-3.5%), LIC India (-3%), ITC Hotels, ABB, and RIL were among the laggards.

Sectoral & Stock-Specific Updates

Auto Sector:
September auto sales numbers came in strong, although analysts cautioned that some demand was skewed due to delayed purchases in August after GST-related rate cuts.
- Hero MotoCorp: Sales rose 8% YoY to 6.87 lakh units, beating market expectations of 6.5 lakh units.
- TVS Motors: Sales up 12% YoY, led by scooters (+17%), motorcycles (+9%), and three-wheelers (+60%).
- Hyundai: Domestic sales rose 10% YoY, with exports up 44%, recording its highest-ever monthly sales for Creta.
- Maruti Suzuki: Reported sales of 1.89 lakh units, in line with expectations, up 2.7% YoY.
- Eicher Motors (Royal Enfield): Sales jumped 43% YoY, with strong demand for premium bikes.
- Tata Motors: Passenger vehicle sales up 12% YoY; stock gained nearly 6% after underperforming peers in recent months.
Sun TV: The stock hit upper circuits after reports that the company may consider selling its stake in IPL franchise Royal Challengers Bangalore (RCB). With a market cap of around ₹2,000 crore and strong cash reserves, the move could unlock significant value for shareholders.
Nyab: The company received a large defence order worth ₹568 crore for supplying empty shells. Promoters also increased stake through open market purchases, signaling confidence in growth.

Macro & Economic Triggers

RBI’s Balanced Stance: Keeping interest rates unchanged avoided margin pressure for banks while ensuring FD rates remain attractive for depositors.
Inflation Forecast Cut: Lowering inflation outlook from 3.1% to 2.6% gave markets comfort on price stability.
Government Employees’ DA Hike: A 3% increase in dearness allowance for central government employees is expected to boost consumption, adding further support to economic activity.

Global Market Check

Gift Nifty traded 25–26 points higher in evening deals.
European markets were also positive.
Dow Jones futures slipped about 100 points, though no major negative triggers were seen globally.

Outlook

Analysts believe the Nifty Bank and Nifty 50 may extend gains if the current momentum sustains. Immediate resistance levels for Nifty Bank are seen around 56,400, while support lies at lower trendline zones.

After nine consecutive sessions of decline, Wednesday’s sharp recovery has been compared to a “Dussehra rally,” with many market participants hopeful of continued positivity in the near term.