Indian equity markets responded sharply to the Reserve Bank of India's latest monetary policy decision, with rate-sensitive sectors leading a broad-based rally.
The Nifty Auto index surged to a record high, while the Nifty Realty index climbed more than 2.5% as investors digested the central bank's hawkish tilt on growth alongside its dovish stance on borrowing costs.
The Monetary Policy Committee (MPC) voted to keep the repo rate unchanged, maintaining the status quo on interest rates.
However, the policy statement carried significant forward-looking signals: the RBI upgraded its GDP growth forecast for fiscal year 2027 to 6.7% and simultaneously lowered its inflation expectations.
This combination of stable financing costs and an improved growth outlook provided immediate tailwinds for capital-intensive and debt-heavy sectors.
The market reaction underscores the sensitivity of Indian equities to monetary policy nuances.