Real Estate and Auto Stocks Surge Following Iran Ceasefire; RBI Maintains Rates
Equity benchmark index Nifty 50 gained over 3% on Wednesday, April 8, driven by rate-sensitive sectors such as auto, consumer, and realty. These sectors advanced after investors turned optimistic following the Reserve Bank of India’s (RBI) monetary policy decision.
Following the policy outcome, the Nifty Bank index rose 4.70%. Auto and realty stocks surged by up to 7% each, while consumer stocks gained around 4%.
About 14 of the 16 major sectoral indices advanced, with IT and pharma being the laggards. Shares of Larsen & Toubro rallied 7%. InterGlobe Aviation jumped 10%, hitting its upper circuit and triggering a temporary trading halt.
The Monetary Policy Committee (MPC) of the RBI kept the repo rate unchanged at 5.25%. This marks the second consecutive pause after the first hold in February, which had followed a 25 basis points rate cut in December last year. The decision to keep rates unchanged was unanimous. Accordingly, the standing deposit facility rate and the marginal standing facility rate were also retained at 5% and 5.5%, respectively.
The MPC also maintained its policy stance as neutral. With this, the committee has kept rates unchanged in four of the last five policy meetings, with rate cuts totaling 125 basis points across February, April, June, and December 2025. This was the first policy decision since the US-Iran conflict entered its sixth week, with a temporary pause in hostilities announced to facilitate negotiations.
RBI Governor Sanjay Malhotra said that the fundamentals of the Indian economy remain strong, providing resilience against external shocks. He added that while rates have been kept unchanged, the central bank remains vigilant and will continue to assess incoming data. The Governor also cautioned that an initial supply shock could evolve into a demand shock if disruptions persist and supply chains take longer to normalize.
The central bank raised its real gross domestic product (GDP) growth projection for financial year 2026 to 7.6% from 7.4% earlier. It has projected growth at 6.9% for financial year 2027, with risks tilted to the downside.
