Sensex Falls 117 Points Following RBI Policy Meet Outcome: Top 10 Takeaways

Indian Stock Market Ends Volatile Trading Session Marginally Red

The Indian stock market closed Friday's trading session with a marginal decline, as investors weighed the central bank's latest inflation and growth projections against measures announced to spur foreign capital flows and support the Indian rupee.

The Reserve Bank of India (RBI) kept its key repo rate unchanged at 5.25%, as expected. However, the RBI flagged risks to growth and inflation from the prolonged West Asia conflict, elevated energy prices, and global supply-chain disruptions, raising fears of stagflation. The RBI slashed its growth projections for FY27 to 6.6% from 6.9% projected in the April monetary policy. It also raised the inflation outlook to 5.1% from 4.6%.

Governor Sanjay Malhotra stated that monetary policy has turned more cautious due to the global economic outlook remaining clouded by the geopolitical impasse in the Middle East. To counter this, the central bank along with the government unveiled measures to attract dollar inflows and ease pressure on the rupee. The government exempted foreign institutional investors from capital gains tax on interest from government securities, a move aimed at boosting inflows into the debt market.

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The RBI also broadened the universe of sovereign bonds available under its unrestricted foreign investment route. Against this backdrop, the BSE barometer Sensex closed the day at 74,243, lower by 117 points or 0.16%. Meanwhile, NSE Nifty ended at 23,366.70, down 49.85 or 0.21%.