Stock market benchmark indices Sensex and Nifty traded higher in early deals on Friday ahead of the RBI’s monetary policy decision.

The 30-share BSE Sensex climbed 269.93 points to 74,629.94 in opening trade. The 50-share NSE Nifty went up by 62.4 points to 23,478.95.

From the 30-Sensex firms, Tech Mahindra, Bajaj Finance, Mahindra & Mahindra, Bajaj Finserv, Eternal and Adani Ports were among the biggest gainers.

– PTI

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The three-day closed-door Monetary Policy Committee (MPC) meeting, which commenced on Monday (September 29, 2025), has raised hopes of a rate cut. 

The October policy comes within weeks of a cut in Goods and Services Tax (GST) and at a time when demand is likely to be created in the domestic market amid the tariff pressure. 

Analysts are divided on whether the rate fixing panel would vote for a rate cut or maintain status quo, considering the positive impact of GST cut on GDP growth and to further control inflation. 

Read more here:

The three-day closed-door Monetary Policy Committee (MPC) meeting, which commenced on Monday (September 29, 2025), has raised hopes of a rate cut.

The October policy comes within weeks of a cut in Goods and Services Tax (GST) and at a time when demand is likely to be created in the domestic market amid the tariff pressure.

Analysts are divided on whether the rate fixing panel would vote for a rate cut or maintain status quo, considering the positive impact of GST cut on GDP growth and to further control inflation.

According to Investment Information and Credit Rating Agency (ICRA), the MPC is likely to maintain status quo on the repo rate. This view is supported by the positive impact of GST reforms on demand, stronger-than-expected Q1 FY 2026 GDP growth, and an inflation trajectory that, while lowered due to GST rationalisation (FY2026 average now 2.6%), is expected to slope upwards thereafter.

“In ICRA’s view, the GST rationalisation could dampen the headline Consumer Price Index (CPI) prints by 25-50 basis points (bps) during Q3 FY2026-Q2 FY2027 relative to our pre-GST rationalisation estimates, taking the average for FY2026 to 2.6%,” said Aditi Nayar, Chief Economist, ICRA Ltd.

“While October-November 2025 may mark a fresh low for the CPI inflation, the trajectory subsequently remains upward sloping. GST rationalisation is unambiguously set to moderate inflation,” she said.

“However, this is the outcome of a policy change and will likely be accompanied by stronger demand. This suggests a status quo for the repo rate in the October 2025 policy review, in what appears to be a close call,” she added.

“While we do believe that there is limited scope for any change in the repo rate in this policy, there is a market view that given the current environment, a rate cut would be warranted,” said Madan Sabnavis, Chief Economist, Bank of Baroda.

“As inflation is anyway well below the target of 4% both before and after GST 2.0, this cannot be a primary consideration. In fact, in Q1-FY27, inflation would be in the region of 4.3-4.4% and average 4-4.5% for the year which means that the real rate would be between 1-1.5% which is in accordance with this thumb rule,” he said.

“Also, growth is expected to steady and be upwards of 6.5% for the year and hence there is no imminent threat to this number even after taking into account the tariff effect. Under these conditions we expect a status quo,” he added.

According to him a change of stance could probably be considered to assuage sentiment and bond yields. “If at all at a later point of time there is a package for exporters against the backdrop of tariffs, a rate cut could be considered. We expect RBI to also revise downwards the inflation forecast but leave the GDP unchanged,” he said.

Barclays said the MPC would go for a 25 bps cut in October, alongside a ‘neutral’ stance.

“After a neutral pause in August, we see the RBI MPC cutting policy repo rate by 25 bps in the upcoming 1 October meeting, acknowledging that this is a close call versus a dovish pause, and deferring the cut to December,” the British bank said in a note.

“Our base case for an October cut is premised on comfort over inflation, which allows further monetary easing. The recent tightening of financial conditions and the tariff overhang clouding the growth outlook in the 12 – month ahead period are also reasons for a forward – looking central bank to cut rates,” it said.

“The tightening of financial conditions is also hindering transmission of policy easing to financial markets and bank lending rates. As for the stance, we expect the RBI MPC to retain it as ‘neutral’,” it added.

Master Capital Services Ltd. said, “Going by the aggressive rate cuts seen in the recent past, expectations for the coming RBI MPC meet are likely to be crafted in favour of policy stability rather than an immediate rate cut.”

“The headline inflation while slipping below the RBI’s 4% target band, is being seen as a temporary phenomenon, courtesy a sharp fall in vegetable prices, rather than a structural one. Also, considering global tariff moves and trade uncertainties also at play, the central bank may prefer to remain cautious for now,” the firm said.

“With interest rate cuts used as a stimulus tool on the domestic front through GST rationalisation, it provides RBI space to watch and assess the impact before considering fresh cuts,” it added.

Jyoti Prakash Gadia- Managing Director, Resurgent India (A SEBI Registered CAT 1 Merchant bank) said, “The inflation is under control, and there is likely a further reduction in prices with the recent major cut in GST rates on consumer products. This leads to a benign outlook on inflation, making a case for a rate cut of at least 25 bps at this stage.”

“The uncertainties caused by the tariff hike by the USA are likely to impact our experts’ performance, making a dent in GDP growth rates. This calls for a timely action to neutralise the negative impact and put extra emphasis on growth,” it added.

“The need for seizing this opportunity to support growth and likely favourable trends in prices is expected to weigh in favour of a rate cut by 25 bps,” it emphasised.

Published – September 29, 2025 11:10 pm IST

The 30-share BSE Sensex climbed 123.45 points or 0.15%, to 81,758.26 in early trade and the NSE went up 39.65 points or 0.16%, to 25,052.80 on Wednesday.
| Photo Credit: Reuters

Benchmark equity indices climbed in early trade on Wednesday (October 9, 2024) ahead of the Reserve Bank of India’s monetary policy decision.

Buying in banking and IT stocks added to the positive trend in markets.

The 30-share Bombay Stock Exchange (BSE) Sensex climbed 123.45 points or 0.15%, to 81,758.26 in early trade. The National Stock Exchange (NSE) went up 39.65 points or 0.16%, to 25,052.80.

Among the 30 Sensex companies, Tata Motors, Tech Mahindra, Bajaj Finance, Maruti Suzuki India, HCL Technologies, State Bank of India, Bharti Airtel, Asian Paints and Axis Bank were the gainers.

ITC, Nestle India, HDFC Bank, Kotak Mahindra Bank, Reliance Industries and JSW Steel were the laggards.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 5,729.60 crore on Tuesday, while Domestic Institutional Investors (DIIs) bought equities worth ₹7,000.68 crore, according to exchange data.

“The ‘Sell India, Buy China’ strategy pursued by the FIIs recently appears to be coming to an end as indicated by the declining FII sell numbers and the profit booking in Chinese stocks, particularly those listed in Hong Kong,” V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

“FIIs are selling on valuation concerns and DIIs are buying because they have deep pockets to buy and the pockets are getting deeper. This trend is likely to continue,” Mr. Vijayakumar added.

Market participants also kept a close eye on the RBI’s monetary policy.

Experts are of the opinion that the RBI may not follow the U.S. Federal Reserve, which lowered the benchmark rates by 50 basis points, and the central banks of some developed nations, which have since reduced the interest rates.

“BJP’s victory in Haryana has come as a morale booster for the party and confidence booster for markets. The sentiments will get a further boost if the Monetary Policy Committee (MPC) decides to change the monetary stance from accommodating to neutral and sound a bit dovish today. A rate cut, however, is unlikely since food inflation continues to be a worry,” he said.

In Asian markets, Shanghai, Hong Kong and Seoul were trading in the red territory while Tokyo was quoting in the green. Global oil benchmark Brent Crude climbed 0.32% to $77.43 a barrel.

U.S. markets ended with gains in overnight deals on Tuesday (October 8, 2024).

On Tuesday (October 8, 2024), the 30-share BSE Sensex rose by 584.81 points or 0.72% to close at 81,634.81. The NSE Nifty jumped 217.40 points or 0.88% to finish at 25,013.15.

The Reserve Bank of India’s Monetary Policy Committee (MPC) wrapped up its three-day deliberations today, deciding to maintain the repo rate at 6.5 per cent for the fourth consecutive time this fiscal year and the tenth time overall. Despite global market movements and the US Federal Reserve’s recent 50-basis-point rate cut, RBI Governor Shaktikanta Das confirmed the decision to keep the rate unchanged. 

The repo rate is the interest rate at which the RBI lends money to commercial banks. Changes in this rate directly influence the interest rates on loans and deposits offered by banks. A stable repo rate often translates to predictable EMI (Equated Monthly Instalment) payments for borrowers.

Impact on loan EMIs

• Home Loans: For individuals with floating interest rates on home loans, the unchanged repo rate means that EMIs will likely remain stable in the near term. Borrowers can breathe a sigh of relief as there won’t be immediate pressure to adjust their monthly payments. 
• Personal and Auto Loans: Similar to home loans, personal and auto loans linked to the repo rate will also see no immediate changes in EMIs. This stability can help borrowers manage their finances more effectively without the fear of sudden increases.
• Fixed-Rate Loans: For borrowers with fixed-rate loans, the impact of the repo rate remains minimal in the short term.

Key outcomes of the meeting

• The MPC decided to keep the repo rate steady at 6.5 per cent, with a majority of 5 out of 6 members supporting this decision.
• The real GDP growth rate for FY25 is projected at 7.2 per cent.
• RBI Governor Shaktikanta Das mentioned that food inflation pressures may ease due to favourable conditions from the kharif sowing season and good soil moisture.
• Change in Policy Stance: The MPC changed its policy stance from ‘withdrawal of accommodation’ to ‘neutral.’
• The committee noted weaker corporate profitability and government expenditure as factors influencing the growth outlook, leading to a downward revision of growth expectations for the June quarter from 7.3 per cent to 7.1 per cent.
• Governor Das highlighted downside risks to the economy, including geopolitical tensions, particularly in West Asia and financial market volatility.
• The MPC’s discussions included expectations for inflation to remain moderate but acknowledged that moderation might be “slow and uneven”.

Governor Das, announcing the Monetary Policy decision, said that CPI inflation for FY25 has been projected at 4.5%. The Committee has maintained its figures from February.

Back in February, CPI inflation was projected at 5.4 per cent for 2023-24 with Q4 at 5.0 per cent.

Food inflation pressures accentuated in February; MPC remains vigilant towards upside risk of inflation, says RBI Governor.

High, persisting food inflation could unhinge anchoring of inflationary expectations, he added. 

Reserve Bank of India Governor Shaktikanta Das.
| Photo Credit: PTI

The Reserve Bank of India (RBI) on February 8 projected GDP growth for the next financial year at 7% on the back of improved household consumption and upturn in private capex cycle.

The real GDP growth is, however, lower than 7.3% estimated by the National Statistical Office (NSO) for the current 2023-24 fiscal aided by strong domestic economic activity and investments. The Indian economy grew 7.2% in 2022-23 fiscal.

In its Monetary Policy Statement, 2023-24, RBI Governor Shaktikanta Das said the recovery in rabi sowing, sustained profitability in manufacturing and underlying resilience of services should support economic activity in 2024-25.

“Among the key drivers on the demand side, household consumption is expected to improve, while prospects of fixed investment remain bright owing to upturn in the private capex cycle, improved business sentiments, healthy balance sheets of banks and corporates; and government’s continued thrust on capital expenditure,” Mr. Das said.

The improving outlook for global trade and rising integration in the global supply chain will support net external demand. The RBI flagged headwinds from geopolitical tensions, volatility in international financial markets and geo-economic fragmentation as risks to growth outlook.

“Taking all these factors into consideration, real GDP growth for 2024-25 is projected at 7% with Q1 (April-June) at 7.2%; Q2 at 6.8%; Q3 at 7% and Q4 at 6.9%. The risks are evenly balanced,” Mr. Das said.

To keep inflation within the targeted 4% (+/-2%) band, the RBI on February 8 retained benchmark interest rate or repo at 6.5%.

The interest rate setting monetary policy committee (MPC) also decided to remain focussed on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.

“Global growth is likely to remain steady in 2024 after a surprisingly resilient performance in a turbulent year gone by. Inflation is edging down from multi-decade highs, with intermittent upticks,” Mr. Das said.

Mr. Das said rural demand in India continues to gather pace, urban consumption remains strong and investment cycle is gaining steam on the back of increased capex. Also, there are signs of revival in private investments.

Food inflation stood at around 10% in August.
| Photo Credit: SUSHIL KUMAR VERMA

India’s retail inflation is likely to have retreated below 6% in September after two months over the central bank’s tolerance threshold, thanks to cooling prices for most essential commodities and food items, barring pulses that are seeing a sustained uptick in market prices.

Bank of Baroda economists, who put out a monthly index on essential commodities’ prices, expect consumer price rise last month to have dropped to 5.7% from 6.8% in August and a 15-month high of 7.4% in July. Food inflation stood at around 10% in August.

The National Statistical Office will release the Consumer Price Index (CPI) numbers for September this Thursday. Last Friday, the Monetary Policy Committee of the Reserve Bank of India (RBI) revised its average inflation projections for the July to September quarter from 6.2% to 6.4%. The upgraded estimate implies that the RBI expects September’s retail inflation print to be between 4.9% and 5%.

“Broadly, price pressures assuaged in September, with the reversal of tomato, potato and onion prices being the primary driver. More importantly, the moderation in food prices is broad-based,” said Dipanwita Mazumdar, economist at Bank of Baroda (BoB), noting that the base effects from last September when inflation stood at 7.4% will also alleviate the headline inflation number to an extent.

Pulses play spoilsport

“The only spoilsport continue to be pulses,” she added, with prices of all varieties of dals clocking sharp sequential upticks in September. The bank reckoned that inflation in tur dal year-on-year, hardened to 31.5% last month from 27.3% in August, while moong dal prices rose 10.7% (from 9.2% in August) — their highest rates in 2023.

Rice prices remained sticky, rising 11.1% in September compared to 11% in August, while onion inflation is expected to have sped to 29.5% from 17.6% in the previous month.

The rise in the BoB Essential Commodity Index moderated to 2.9% in September from 6.3% in August, with 35% of the commodities seeing softening price momentum. On a month-on-month basis, the index was down 1.8% from a 0.7% uptick in August, with retail prices of 12 of 20 essential commodities dropping

In a report on food plate costs last week, Crisil Market Intelligence and Analytics estimated a 17% dip in the cost of vegetarian food in September from August levels, while non-vegetarian plates became 9% cheaper. The firm had cited lower tomato and LPG cylinder prices as the main factors for the price correction.

The Monetary Policy Committee (MPC) of the Reserve Bank of India on August 10 decided unanimously to keep the policy repo rate unchanged at 6.50%. 
| Photo Credit: The Hindu

The Monetary Policy Committee (MPC) of the Reserve Bank of India on August 10 decided unanimously to keep the policy repo rate unchanged at 6.50%. 

Announcing the bi-monthly monetary policy on Friday, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) unanimously decided to keep the repo rate unchanged at 6.5 per cent.

The Governor said the real GDP growth for 2023-24 is projected at 6.5%. The latest CPI inflation projection for 2023-24 is at 5.4%, the same as projected previously. Indian forex reserves stood at $586.9 billion as on September 29.

Mr. Das said inflation is likely to ease in September, and the MPC would remain watchful of inflation and remain resolute in aligning inflation to the targeted level. Near-term inflation to soften on lowering of vegetable price and reduction in cooking gas cylinder rate, he added.

Domestic economy exhibits resilience on the back of strong demand, the Governor added.

Private sector capex is gaining ground as suggested by production of capital goods, he said.

The transmission of 250 basis point repo rate cut is still incomplete, the RBI Governor said.

The indications are that food inflation may not see sustained easing in Q3, the Governor added.

RBI may have to consider open market operation with regard to G-secs to manage liquidity, Mr. Das said.

RBI also has decided to double the gold loan under the bullet payment scheme to ₹4 lakh for Urban Cooperative Banks. The Payment Infrastructure Development Fund scheme has been extended by two years to December 2025. Internal Ombudsman Scheme to be further fine-tuned to safeguard the interest of customers, the Governor said.

The government has mandated the RBI to keep CPI inflation at 4 per cent with a margin of 2 per cent on either side.