Banks, Autos, Financials, Realty Stocks Rally Up To 5% As RBI Cuts Repo Rate By 50 bps

Last Updated:June 06, 2025, 11:54 IST

Rate-sensitive sectors—such as banks, autos, real estate—surged on Friday after RBI delivered a surprise 50-basis point cut in the repo rate

RBI Repo Rate Cut: Rate-sensitive sectors—such as banks, autos, and real estate—surged on Friday after the Reserve Bank of India (RBI) delivered a surprise 50-basis point cut in the repo rate and a 100-basis point cut in the cash reserve ratio (CRR). Additionally, the central bank shifted its policy stance from ‘accommodative’ to ‘neutral’.

Following the RBI’s announcement, the Bank Nifty rose 1.3% to touch a record high of 56,515, driven by strong gains in key banking stocks. IDFC First Bank jumped 5%, Axis Bank climbed 2.6%, Kotak Mahindra Bank rose 1.8%, and HDFC Bank advanced 1.5%. Public sector banks such as PNB, Bank of Baroda, and IndusInd Bank also gained over 1% each.

In the broader financial services space, HDFC AMC surged more than 5%, while Bajaj Finance, Shriram Finance, SBI Card, and Cholamandalam Finance added between 3% and 4%.

Commenting on the RBI’s move, Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said: “The higher-than-expected 50bp rate cut is positive for growth, but slightly negative from a near-term market perspective. As the RBI Governor noted, this is a front-loaded cut, and the shift to a neutral stance suggests that more cuts are unlikely unless warranted. While this could pressure banks’ margins, the anticipated credit growth should help offset that impact.”

The Nifty Realty index jumped nearly 3%, led by a 5% rally in Godrej Properties. DLF advanced 4.4%, while Prestige Estates, Sobha, Oberoi Realty, Brigade Enterprises, Anant Raj, and Lodha saw gains between 1% and 3%.

Anuj Puri, Chairman of ANAROCK Group, noted: “The CRR cut will boost liquidity in the banking system, enabling more funding for developers and potentially improving project completion timelines. It also opens the door for banks to lower home loan interest rates, positively impacting sentiment in the affordable and mid-income housing segments. However, global trade tensions and tariffs imposed by the Trump administration have raised input costs, which could pressure luxury and commercial segments. Policy support and a pivot to domestic sourcing will be key for sustained growth.”

The Nifty Auto index was up 1.15%, supported by buying in Ashok Leyland, Hero MotoCorp, and Maruti Suzuki, which gained up to 3.3%.

This marks the RBI’s third consecutive rate cut this year, reflecting the central bank’s focus on supporting economic growth amid easing inflation.

Aparna Deb

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More

First Published: