India's Q2 GDP growth likely at 6.8%, beats China for fourth straight quarter
- 1.Q2 GDP estimated at 6.8% vs 6.7% in Q1
- 2.Manufacturing PMI at 56.8 supports growth
- 3.Services sector leads with 8.4% expansion
Indian stock markets advanced sharply today as investors positioned ahead of the upcoming RBI monetary policy decision, with rate-sensitive sectors leading gains.
Indian equity markets witnessed a strong rally in today's session, with the benchmark Nifty 50 index advancing past the key psychological level of 24,800. The rally was broad-based, with 34 out of 50 Nifty constituents ending in the green.
The banking sector was the standout performer, with the Bank Nifty index surging 1.4% driven by strong buying in HDFC Bank, ICICI Bank, and Kotak Mahindra Bank. Analysts attribute the outperformance to positioning ahead of the Reserve Bank of India's upcoming monetary policy committee (MPC) meeting scheduled for next week.
RBI Policy Expectations
Market participants largely expect the RBI to maintain the repo rate at 6.50%, consistent with its neutral stance adopted earlier this year. However, there is growing speculation about a potential rate cut in the December policy meeting if inflation continues to moderate.
"The shift to a neutral stance was a significant signal. We believe the RBI is setting the stage for rate cuts beginning in Q4 FY26, which would be a major positive for rate-sensitive sectors like banking, real estate, and NBFCs," said a senior analyst at Kotak Securities.
FII Activity
Foreign institutional investors (FIIs) turned net buyers today after two consecutive sessions of selling, pumping in ₹1,842 crore into Indian equities. Domestic institutional investors (DIIs) also supported the market with purchases of ₹1,124 crore.
The Indian rupee remained stable at 83.48 per US dollar, providing additional comfort to foreign investors. The India VIX — the fear gauge — dropped to 12.4, signaling reduced market volatility.
Sectoral Performance
All major sectoral indices ended in positive territory. The Nifty IT index gained 0.8% despite weak global cues from the US technology sector. Nifty FMCG rose 0.9% on healthy rural demand expectations, while Nifty Realty jumped 2.1% on rate cut hopes.
Metal stocks bucked the trend, with the Nifty Metal index declining 0.4% on weak base metal prices globally amid demand concerns from China.