Sensex, Nifty Climb After RBI Rate Cut Boost Sentiment

An end-of-day recap of all that transpired in the Indian markets, highlighting the major price movements and the factors driving them

By Dehuti Jani

Dehuti Jani is an experienced project manager who also works as an independent financial journalist.

December 5, 2025 at 11:47 AM IST

Indian equities ended higher on Friday after the RBI’s MPC, led by Governor Sanjay Malhotra, cut the repo rate by 25 bps to 5.25%, maintained a neutral stance, lowered the FY26 inflation forecast to 2%, and lifted the growth projection to 7.3%.

The Sensex rose 447.05 points to 85,712.37, while the Nifty50 gained 152.7 points to 26,186.45. Broader markets were mixed, with midcaps edging up and smallcaps slipping. PSU Banks led sectoral gains, followed by Banking, Auto, IT, Metal, Realty, Oil & Gas and Chemicals, while Media, Pharma, Consumer Durables and FMCG ended in the red. Trading platforms Zerodha, Groww, and Angel One experienced disruptions due to a major Cloudflare outage.

The RBI also released an updated GDP outlook, forecasting 7% growth in Q3, 6.5% in Q4, and 6.7% and 6.8% in the first two quarters of next year, noting that risks remain evenly balanced. The rupee’s record-low levels and global volatility kept sentiment cautious, but the rate cut and upgraded growth estimates helped anchor market optimism.

Top Movers of the Day

Following the RBI’s 25 bps repo rate cut to 5.25%, the Nifty Financial Services index gained more than 1%, led by SBI Cards, Shriram Finance, Cholamandalam Investment, Bajaj Finance, Bajaj Finserv, Muthoot Finance, SBI Life, and ICICI Prudential Life.

IndiGo dominated headlines as it announced cancellations of nearly 500 flights on Friday, including suspending all departures from New Delhi, following severe staffing shortages tied to new pilot duty norms. Analysts noted that while the stock may remain volatile until operations stabilise, the correction could offer a long-term entry opportunity in India’s aviation growth story. The turbulence in aviation stocks lifted SpiceJet, which jumped 9%, while GMR Airports slipped 2% amid broader travel disruption concerns.

BEML attracted strong interest after signing a tripartite MoU with HD Korea Shipbuilding & Offshore Engineering and HD Hyundai Samho Heavy Industries to collaborate on maritime and port crane manufacturing—an expansion viewed as strategically significant for its engineering portfolio.

Kaynes Technology fell 8% to an eight-month low after Kotak Institutional Equities raised concerns over accounting practices and elevated working-capital intensity.

Indus Towers surged 4% to a five-month high of ₹416.95 on heavy volumes, extending its upward momentum in the telecom infrastructure space.

Meanwhile, the IPO of Aequs, an aerospace components manufacturer, saw exceptional demand with subscriptions crossing 28 times by the final day.

In corporate developments, British American Tobacco plans to sell ₹2,948 crore worth of ITC Hotels shares via a block deal on 5 December, adding another layer of activity in the consumer and hospitality segment.

In pharmaceuticals, Lupin gained after obtaining tentative USFDA approval for its Siponimod tablets and signing an exclusive licensing deal with Valorum Biologics for its biosimilar Armlupeg™.

Futures & Options
Nifty December 2025 futures closed at 26,335, trading at a 148.54 point premium to the Nifty’s cash close, which gained 0.59% on the day. Volatility continued to ease, with India VIX falling 4.64% to 10.32, reflecting a calmer near-term outlook following the RBI’s policy decision. Kaynes Technologies India, InterGlobe Aviation (IndiGo), and SBI were the most actively traded stock futures, as the market moved through the December 2025 series ahead of its 30 December expiry.

Bonds
Indian government bond yields fell on Friday following the RBI’s rate cut and liquidity-support measures, with the benchmark 10-year yield slipping to 6.5166% from 6.5267% the previous day. The central bank’s updated projections for FY26 indicate an increase in GDP growth to 7.3% and a reduction in inflation to 2%. Additionally, a liquidity injection of ₹1.45 trillion, comprising ₹1 trillion through OMO purchases and a $5-billion USD/INR buy–sell swap contributed to alleviating upward pressure on yields. At the latest government auction, the 6.48% GS 2035 drew strong demand, allowing the RBI to set a cut-off yield of 6.4881% and a weighted average yield of 6.4812%, indicating firm appetite for medium-tenor government securities.

Forex
The rupee ended almost unchanged on Friday after the RBI’s rate cut, closing at 89.98 per dollar and marking a finish to a volatile week in which it slipped below the 90 mark for the first time. Despite the muted session, the currency still depreciated nearly 0.6% over the week, pressured by a widening trade deficit, weak investment flows, and stalled India–US trade negotiations.

Crypto
Crypto markets cooled on Friday after several days of steady gains, with the PayFi sector leading declines at nearly 4%. Bitcoin slipped 1.34% to $92,280, falling back below $93,000, though strong support remains intact at $90,500–$91,200, where long-term holders continue to accumulate despite increased short-term selling pressure. Ethereum dipped 1.08% to $3,176, hovering just below the key $3,200 resistance with near-term support around $3,020. The global crypto market cap stands at $3.14 trillion, reflecting a brief cooling phase amid otherwise healthy liquidity and institutional participation.

US Stock Futures
US stock futures edged higher on Friday as investors awaited the delayed PCE inflation data, a key indicator that could reshape expectations for the Federal Reserve’s next policy move. S&P 500 futures rose 0.2%, Nasdaq 100 futures climbed 0.4%, and Dow Jones futures held near flat, reflecting a cautious but constructive tone after Thursday’s mixed session.

US Treasury Notes
US Treasury yields held steady on Friday, with the 10-year near 4.10% and the 2-year around 3.53%, as investors awaited the delayed PCE inflation data that could influence expectations of a potential Fed rate cut next week. Mixed labour signals with Challenger reporting higher November layoffs alongside initial jobless claims falling to a three-year low, kept markets cautious but engaged, reinforcing the wait-and-watch tone across the curve.

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