The Indian stock market, including the Sensex and Nifty, took another tumble on Friday, February 7, 2025, making it the third day in a row of losses. This happened even after the Reserve Bank of India (RBI) did what many expected: it lowered interest rates for the first time in almost five years, hoping to give the slowing economy a kickstart.
The RBI cut the repo rate (a key interest rate) by 0.25%, down to 6.25%. But the market didn't celebrate. Financial, consumer goods, and IT stocks all fell, pulling the Nifty down. On the bright side, telecom, metal, and auto stocks did well.
At the end of the trading day, the Sensex was down about 197 points (0.3%), and the Nifty fell by 43 points (0.2%). More stocks went down than up.
V K Vijayakumar, a market expert from Geojit Financial Services, explained that while the rate cut is good news, big foreign investors are still selling Indian stocks. He said that until those foreign investors start buying again, it's hard to see the market having a strong, sustained rally.
The banking sector, in particular, had a tough day. The RBI's policy didn't include any extra measures to make it easier for banks to lend money, which disappointed some investors. Big banks like ICICI Bank and SBI saw their stock prices drop.
Vijayakumar pointed out that auto stocks are doing well because of recent government budget changes that encourage people to spend more. He also thinks real estate should benefit from the lower interest rates, but it hasn't happened dramatically yet. He emphasized that the biggest factor affecting the market right now is the selling by foreign investors.
Rajani Sinha, Chief Economist at CareEdge Ratings, said that the RBI is keeping its options open to adjust policy as needed, especially because of uncertainties in the global economy. She expects the RBI to keep trying to make sure there's enough money flowing in the financial system.
Sinha also warned about a potential global trade war, mentioning the US imposing tariffs on goods from other countries. While it's not clear yet how much this will affect India, it could impact the country's growth, inflation, and trade.
Back home, some sectors did better than others. The metal sector jumped 2.5% because people are optimistic about more infrastructure spending and a stronger real estate market (both of which use a lot of metal).
Shishir Baijal, from Knight Frank India, said that lower interest rates should make it easier for people to get home loans, boosting the housing market. He hopes banks will pass on the lower rates to customers, making homes more affordable, particularly those under Rs 50 lakh.
Winners and Losers
Some of the biggest losers on the Nifty 50 were ONGC, ITC, SBI, Adani Ports, and Britannia. On the winning side, Tata Steel, Bharti Airtel, Trent, JSW Steel, and Hindalco all saw their stock prices rise.
Bharti Airtel's stock jumped 4% after it reported good profits, partly due to some one-time gains and price increases. Bikaji Foods, however, had a rough day, with its stock dropping 10% after its profits fell sharply. Sonata Software also slumped after failing to meet expectations.
DISCLIMER: Prameya or Prameya News7 does not endorse the views or recommendations expressed by experts/brokerages in this article. These are solely their opinions. Readers are advised to consult with a qualified financial advisor before making any investment or trading choices.
