Sensex Gains Nearly 450 Points, Nifty Over 26,000: RBI's 25 Bps Rate Cut Among Key Factors Behind Market Rise

Friday, 5 December 2025: Domestic equities staged a strong recovery on Friday, with the Sensex climbing nearly 500 points and the Nifty moving close to 26,200. After a cautious start triggered by foreign fund outflows and mixed global cues, markets regained momentum as investor sentiment strengthened following the Reserve Bank of India’s 25-basis-point policy rate cut.

BSE Sensex

The BSE Sensex closed at 85,712.37, recording a gain of 447.05 points (0.52%) as of 3:30 PM IST on 5 December. The index opened the session around 85,125, after which it moved within a narrow but positive range. Through late morning and early afternoon, the Sensex briefly touched an intraday high near 85,796, while the lower end of the day’s movement hovered close to 85,078. The index continues to remain near its broader trend range, positioned between its 52-week high of 86,159 and 52-week low of 71,425, indicating overall market resilience through the trading cycle.

Nifty 

The Nifty 50 ended the session at 26,186.45, rising 152.70 points (0.59%) as of 3:31 PM IST on 5 December. The index opened near 25,999 and moved steadily upward through the afternoon. It briefly touched a high around 26,202, while the intraday low hovered near 25,985. With this advance, the Nifty recovered from its previous close of 26,033.75, staying well within its broader yearly range between the 52-week high of 26,325.80 and 52-week low of 21,743.65, reflecting continued market strength.

The Reduction of the Rate by RBI Gives Confidence to the Market

The Monetary Policy Committee unanimously voted to reduce the repo rate to 5.25%. The cut is expected to ease borrowing costs for consumers and corporates, supporting credit demand and economic activity. This policy shift acted as a major confidence booster, helping indices reverse early weakness as domestic earnings optimism aligned with the supportive monetary stance.

Purchases In the Rate Sensitive Sectors Increase

Stocks sensitive to interest rate movements responded to the policy announcement positively. Nifty Financial Services rose by almost 1% and the Bank Nifty index and PSU Bank index registered stable gains. The low interest rates are more likely to trigger the growth of credit which will be beneficial to banks, non-bank financial institutions and home and automobile purchasers. 

Reflecting this, the auto index rose around 0.5% and the realty index jumped close to 1%, driven by expectations of strengthened demand.

The Momentum Is Contributed by the Crude Price Relief

Global crude oil prices also supported the rally. Brent crude edged lower to around USD 63 per barrel, easing concerns over inflation and input costs. Softer crude prices tend to benefit manufacturing, logistics, and FMCG firms, contributing to broader market strength.

International Signals and a Fall in Volatility Favour A Rally

While Asian markets remained mixed, benchmark indices in South Korea and China posted gains. U.S. markets were largely flat overnight, but local sentiment improved as India VIX fell 2.29% to 10.57, indicating reduced volatility and improved risk appetite. The combination of favourable global signals, easing crude prices, and RBI’s accommodative policy stance helped sustain the market’s upward trend through the session.

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