Should you avoid rate-sensitives stocks as RBI MPC holds policy rates?

Technical charts suggest that Bank Nifty may exhibit range-bound trade in the near-term; Auto index may ride to new highs, while Realty index could see sharp swings in the coming months.

The Reserve Bank of India (RBI)-appointed Monetary Policy Committee in the September 29 - October 1, 2025, meeting decided to leave interest rates unchanged.  RBI Governor Sanjay Malhotra said the repo rate remains unchanged at 5.50, while the Marginal Standing Facility and Standing Deposit Facility bank rates remain untouched at 5.75 per cent and 5.25 per cent. The RBI also maintained its stance as 'neutral'.  So far in the calendar year 2025, RBI has lowered the repo rate by 100 basis points. The Central Bank reduced rate by 25 basis points (bps) each in the February and April 2025, and 50 bps in the June meeting.  Will the current pause on interest rate cycle dent sentiment at rate-sensitive shares? Here's how the key rate sensitive sectoral indices - Bank Nifty, Nifty Auto and Nifty Realty are placed on the technical charts. 

Bank Nifty

Current Level: 54,800  Likely Target: 55,800 / 52,900  Upside Potential: 1.8%  Downside Risk: 3.5%  Support: 54,200; 53,850; 53,500; 53,200  Resistance: 55,180; 55,500  The Bank Nifty is likely to exhibit range-bound movement in the near-term in the band of 52,900 - 55,800 levels, hints the daily chart. 

 

  At present, Bank Nifty is seen quoting around the 20-Day Moving Average (20-DMA), which stands at 54,830 levels, above which the index is expected to counter resistance around the 50-DMA at 55,180 levels and 55,500 levels.  On the other hand, the recent low around 54,200 could act as a first line of defense, below which the index may seek support around the lower-end of the Bollinger Bands on the daily chart around 53,850 levels. On the downside, the 200-DMA around 53,200 and the 50-Week Moving Average (50-WMA) at 52,900 are likely to be the key support levels. 

Nifty Auto

Current Level: 26,663  Likely Target: 28,750 / 24,400  Upside Potential: 7.8%  Downside Risk: 8.5%  Support: 26,100; 25,450  Resistance: 27,370; 27,600  The Nifty Auto index has corrected by 5 per cent from its recent high of 27,726 registered on September 23. The daily chart suggests that the Auto index may face downward pressure in the near-term as long as the index remains below 27,370 levels. On the downside, the index may reach 26,100 - 25,450 levels. 

 

  A breakout above 27,370 levels can reignite the upward rally, with a potential target of 28,750 levels. The index could face interim resistance around 27,600 levels. The broader trend for the Auto index is likely to remain positive as long as the index sustains above 24,400 levels, shows the weekly chart. 

Nifty Realty

Current Level: 873  Likely Target: 1,025 / 695  Upside Potential: 17.4%  Downside Risk: 20.4%  Support: 831; 755  Resistance: 891; 916; 937  The Nifty Realty index is seen quoting close to its key weekly trend line support, which stands around 831 levels. The Realty index is likely to remain in 'buy on dips' mode as long as the index sustains above 831 on a weekly closing basis. A break on the downside, could drag the index to 755 - 695 levels. 

 

  On the positive side, as long as 831 is protected, the Nifty Realty index can attempt a pullback towards the 100-WMA, which stands at 937. Break above this can trigger a fresh rally towards 1,025 levels. Interim resistance for the index exists around 891 and 916 levels.  Conclusion: The Auto index looks relatively better placed compared to the Bank Nifty and Nifty Realty. The Auto index can potentially rally up to 8 per cent in the bullish case, while Nifty Realty may witness sharp volatility, with up to 20 per cent downside risk. Banking shares are likely to exhibit range-bound trade in the near-term as per cues from the Bank Nifty.