Markets Rebound Sharply as RBI Delivers Surprise Rate Cut and Liquidity Boost

In a dramatic turnaround on Friday, Indian stock markets rebounded strongly, with the Sensex surging over 1,000 points from its intraday low and the Nifty climbing past the 24,900 mark. This sharp rally came after the Reserve Bank of India (RBI) announced a higher-than-expected 50 basis points (bps) cut in the repo rate, along with liquidity-enhancing measures to support the economy.

The Sensex soared by 1,049.93 points from its day’s low, reaching 82,189.93, while the Nifty rallied by 215.95 points, or 0.87%, to 24,966.85.

RBI’s Bold Move Surprises the Market

The highlight of the day was the RBI’s decision to slash the repo rate by 50 bps, bringing it down to 5.5%, the lowest in three years. This move came as a surprise, with most market participants expecting a milder 25 bps cut.

“The RBI’s aggressive rate cut reflects its intent to boost consumption and revive investment,” said a market observer.

The central bank justified the rate cut by pointing to moderating inflation and a need to inject momentum into the economy. The move was well received by the markets, which had started the day on a negative note but reversed course swiftly after the policy announcement.

Strong Policy Support and Global Cues Drive Sentiment

Apart from the rate cut, the RBI also announced liquidity-boosting measures, which added to the market’s optimism. Improved global cues also played a role in lifting investor sentiment.

The sharp market rebound was driven by renewed buying interest across banking, financial, and rate-sensitive stocks, which benefited directly from the policy easing.

“Markets cheered the central bank’s proactive stance,” analysts noted. “The unexpected rate cut and supportive tone sent a strong positive signal.”

Investors Eye Further Upside

With the RBI’s bold policy move and a stabilizing inflation outlook, investors are now hopeful of continued market momentum. The sharp recovery also underlines the sensitivity of Indian equity markets to central bank actions and macroeconomic indicators.

This rally marks one of the strongest intraday turnarounds in recent weeks, showing investor confidence in RBI’s ability to manage economic conditions effectively.

Conclusion

The RBI’s 50 bps repo rate cut came as a positive surprise and proved to be a turning point for the day’s market performance. Both the Sensex and Nifty bounced back sharply, backed by strong policy support and improved global trends. Going forward, market participants will closely watch for further signals from the central bank and inflation data to gauge future trends.