HIGHLIGHTS

• Tata Investment jump 8% as reports Tata Capital IPO nearing SEBI nod
• ICICI Lombard, Go Digit shares rally as Centre likely mulls up to 25% hike in third-party motor insurance premiums
• Gold loan NBFCs rally as RBI hikes loan-to-value ratio limit to 85%
• GHV Infra Projects secures ₹546 crore contract for Mumbai roadworks
• Azad Engineering shares tank 8% after ₹780 crore block deal

Indian equities ended the week on a strong note, staging a sharp rebound after two weeks of losses, buoyed by the Reserve Bank of India's surprise policy easing. The RBI cut the repo rate by an aggressive 50 basis points and reduced the cash reserve ratio, signalling a firm shift toward growth support. The policy pivot was well received by investors, especially in interest rate-sensitive sectors such as banking, real estate, and non-banking financial companies.

The Nifty and Sensex gained steadily through the week, with Friday’s rally sealing the gains. The RBI’s dovish tone, supported by cooling inflation and a stable macro backdrop, triggered broad-based buying across financials. The central bank’s assurance that recent stress in unsecured lending is manageable also lifted sentiment in the banking space. IndusInd Bank led from the front, rising 3% after coming under scrutiny in recent sessions.

Sectoral Performance
Among sectoral performers, the Nifty Realty index soared 5% for the week, driven by hopes of a demand revival in the housing sector due to lower home loan rates. Financial stocks also logged robust gains, with NBFCs seeing renewed interest. The optimism spilled over to other domestic-oriented sectors like capital goods and consumer durables.

However, the market wasn’t without pockets of caution. Defence-linked stocks came under pressure, with Solar Industries and Hindustan Aeronautics falling up to 3%, tracking global volatility in the defence sector. The media index also underperformed, emerging as the only sectoral laggard on a weekly basis.

Top Gainers	% Change	Top Losers	% Change
NIFTY REALTY	4.68%	NIFTY MEDIA	-1.14%
NIFTY METAL	1.90%
NIFTY PRIVATE BANK	1.79%
NIFTY FINANCIAL SERVICES	1.75%
NIFTY AUTO	1.52%

Indian government bonds posted a mixed performance on Friday after the RBI surprised markets with a steeper-than-expected policy rate cut and a change in its stance. While short-duration bonds rallied, long-term bonds came under pressure.

The RBI slashed the repo rate by 50 basis points to 5.50%, the steepest cut in five years, citing easing inflation and the need to support growth. However, the central bank also shifted its policy stance from “accommodative” to “neutral,” which tempered hopes of further aggressive easing.

The benchmark 10-year gilts yield jumped to 6.2373%, sharply higher than the previous close of 6.1960%, as traders adjusted positions to reflect the central bank’s mixed signals. During the session, the yield swung in a broad range of 6.1059% to 6.2400%, highlighting investor uncertainty. In contrast, the five-year 6.75% 2029 bond yield declined to 5.8150%, aided by expectations of improved liquidity.

Adding to the liquidity boost, the RBI cut the cash reserve ratio by 100 basis points in four staggered phases from September to November. This move will inject ₹2.5 trillion into the banking system, encouraging more lending.
Despite the surprise moves, most economists now expect the RBI to pause rate actions for the rest of the fiscal year, keeping the benchmark rate steady at 5.50%. Going forward, bond markets will remain sensitive to inflation data and global interest rate trends.

Tenure	Today	Previous
10-year Gilt	6.24%	6.21%
5-year gilt	5.82%	5.85%
5-year OIS	5.68%	5.64%

The Indian rupee ended modestly higher on Friday, supported by a rally in domestic equities following the RBI 's sharp rate cut. The central bank delivered a surprise 50 basis point reduction in the repo rate, its steepest in five years, which lifted market sentiment and lent support to the local currency.

The rupee settled at 85.6250 against the US dollar, gaining from its previous close of 85.79. Despite the single-day recovery, the rupee posted a 0.2% weekly decline, reflecting ongoing external pressures.

Friday’s gains were largely driven by improved domestic investor confidence after the RBI's dovish measures aimed at reviving growth. Equity market inflows helped offset headwinds from a stronger dollar, as the dollar index rose 0.3% to 98.9 ahead of the release of US non-farm payrolls data. This key report is expected to provide direction on the Federal Reserve’s policy outlook amid global economic uncertainty.

Unit	Today	Previous
Dollar/Rupee	85.63	85.90
Dollar Index	98.98	99.21
1-year Dollar/rupee premium (%)	1.83%	1.90%

OUTLOOK
Indian markets are expected to begin the coming week on a positive note, building on Friday’s momentum driven by the RBI’s aggressive 50 basis point repo rate cut and a 100 bps reduction in the cash reserve ratio. The dovish policy shift, aimed at reviving growth, is likely to support sentiment across interest rate-sensitive sectors. Financials, real estate, and capital market-related stocks should continue to lead gains, while broader market participation may remain firm. 

In the bond market, short-duration gilts will likely remain in demand, buoyed by the rate cut and the RBI’s liquidity-boosting CRR move, which is set to infuse ₹2.5 trillion into the banking system over three months. Yet, long-end bonds may stay under pressure due to the central bank’s shift in policy stance from "accommodative" to "neutral", dampening hopes of further aggressive easing. The benchmark 10-year yield, which closed at 6.2373% on Friday, could stay elevated if inflation risks re-emerge or global yields firm.

The Indian rupee may find modest support from improving domestic sentiment and equity inflows, especially as the RBI’s growth-friendly stance reassures investors. However, external pressures such as dollar strength and US economic data releases could keep upside limited.