RBI Keeps Rates Steady: Real Estate and Bank Stocks Slip, Autos Lag
The Reserve Bank of India (RBI) maintained interest rates at 5.5%, leading to a cautious market reaction. Real estate, bank, and auto stocks declined as investors adjusted to the unchanged rates and neutral policy stance.
RbiInterest RatesReal Estate StocksBank StocksAuto StocksReal Estate NewsAug 06, 2025
The Monetary Policy Committee (MPC) decided to maintain the repo rate at 5.5%, following a total of 100 basis points in rate cuts over the last three policy meetings. The neutral policy stance was retained, with all six committee members voting in favor of a pause. This decision reflects a wait-and-watch approach amid global economic uncertainty and signs of domestic resilience.
Following the policy announcement, rate-sensitive sectors saw a downturn. The Nifty Bank index, which had reached an intraday high of 55,507.20, lost momentum and fell 0.5% from its day’s peak.
Among the Major Banking Laggards After the RBI Policy Announcement:
IndusInd Bank dropped 2.68% to Rs 797.20, with a trading volume of 23.82 lakh shares, generating Rs 192.37 crore in turnover.
AU Small Finance Bank slipped 2.49% to Rs 724.15.
IDFC First Bank fell 1.31% to Rs 68.42, on strong volumes of 55.32 lakh shares.
Canara Bank edged down 0.77%, and PNB also declined 0.68%.
Real estate stocks were equally under pressure, with the Nifty Realty index ending as one of the session’s biggest sectoral losers, down over 2.3%.
Key Real Estate Drags Included:
Phoenix Mills, down 2.59% at Rs 1,437.90.
Godrej Properties, lower by 2.44%.
Brigade Enterprises, down 2.26%.
Prestige Estates, off 1.86%.
DLF, down 1.78% at Rs 767.05.
Governor Sanjay Malhotra, in his post-policy address, noted that India remains well-positioned against a volatile global backdrop. He highlighted the success of earlier rate cuts in driving faster monetary transmission. “With frontloaded easing already in play, policy space is limited, but liquidity tools remain at our disposal,” he said.
Despite the pause, the central bank’s messaging was far from hawkish, indicating a continued focus on balancing economic growth and stability.
Frequently Asked Questions
Why did the RBI keep interest rates unchanged?
The RBI kept interest rates unchanged to maintain a cautious approach amid global economic uncertainty and signs of domestic resilience, following a total of 100 basis points in rate cuts over the last three policy meetings.
Which sectors were most affected by the RBI's decision?
The real estate, banking, and auto sectors were most affected, with these stocks seeing significant declines following the announcement.
What is the current repo rate set by the RBI?
The current repo rate set by the RBI is 5.5%.
How did the Nifty Bank index react to the policy announcement?
The Nifty Bank index initially reached an intraday high of 55,507.20 but then lost momentum and fell 0.5% from its day’s peak.
What was the performance of the Nifty Realty index after the policy announcement?
The Nifty Realty index ended as one of the session’s biggest sectoral losers, down over 2.3%.
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