rewrite this title and make it good for SEORBI action helps Sensex, Nifty50 bounce back after 8-day fall as D-Street heads into mid-week holiday

Domestic equity benchmarks registered strong gains on Wednesday after the RBI kept the key lending rates unchanged, as expected, while tweaking its GDP and inflation forecasts and announcing a slew of measures for the financial sector. Both main indices surged 0.9 per cent for the day, with the the Sensex gaining 715.7 points to end at 80,983.3 and the Nifty50 adding 225.2 points to 24,836.3. Analysts said the RBI’s latest steps will provide a long-term boost for the financial space, supporting growth in the world’s fourth-largest economy.

The Nifty Bank — a barometer of bank stocks — surged 1.4 per cent. Financial service-related stocks enjoy the maximum weightage of 37 per cent in the Nifty50. 

EDITOR’S TAKE | October RBI policy has several firsts, spells positive signals for markets, banking, economy, says market guru Anil Singhvi

Zee Business Managing Editor Anil Singhvi highlighted that the RBI’s latest policy is full of positive signals, including:

30-basis-point increase in the annual GDP forecast
Half a per cent reduction in the inflation projection
Easier norms for mergers and acquisitions
Steps to internationalise the rupee
Special focus on the ease of doing business

A fuller pass-through of the existing 100-basis-point easing in the current rate cycle may lead to another rate cut in FY26, he said. “Overall, the policy is good for the equity and bond markets, the banking system and for the economy,” said the market wizard. 

A summary of key RBI announcements

The RBI now projects economic growth of 6.8 per cent in FY26, instead of the 6.5 per cent earlier, pegging consumer inflation at 2.6 per cent instead of the 3.1 per cent earlier. Central bank governor Sanjay Malhotra had already said that the country’e economic expansion was strong but below the “aspiration” of near 8 per cent. 

He announced as many as 22 measures for the financial space, with a majority of them aimed at aiding credit flow in the banking system. The RBI proposed to do away with a 2016 framework that limited bank lending to large corporations in a bid to reduce the risk of concentrated lending, a significant change set to enable commercial banks to lend more to large businesses. The central bank proposed lower risk weights on select segments to reduce the overall capital requirements, particularly for MSMEs and residential realty.

It also raised a cap on IPO financing to Rs 25 lakh from Rs 10 lakh per individual.

Broader markets

Among broader indices, the Nifty Midcap 100 and the Nifty Smallcap 100 jumped 0.9 per cent and 1.0 per cent respectively, reflecting heavy interest in the minnows as well. 

The country’s financial markets will observe a holiday on Thursday for Gandhi Jayanti.