Rate-sensitive sectors drag stock market lower day ahead of RBI policy

India's benchmark indexes closed lower on Thursday, dragged down by rate-sensitive auto and consumer stocks as caution prevailed a day ahead of the Reserve Bank of India's (RBI) rate decision.

 

The Nifty 50 shed 0.39% to 23,603.35, while the BSE Sensex slipped 0.27% to 78,058.16. 

Both benchmarks began the day about 0.3% higher each after logging marginal losses on Wednesday, with sentiment remaining neutral ahead of the RBI's widely expected first interest rate cut in nearly five years. 

Nine of the 13 major sectors declined on the day. 

Rate-sensitive sectors such as the financials closed flat, auto and consumer firms lost about 1% each and realty stocks shed 2.2%, respectively.

 

A rate cut, if it happens, will come less than a week after the government, in the federal budget, cut personal tax rates to stimulate consumption. 

"Investors will cheer if RBI opts for a rate cut since it will provide a much-needed thrust to economic growth," said Umesh Kumar Mehta, chief investment officer at Samco Mutual Fund. 

"But there is rising apprehension over whether a rate cut could potentially hurt the Indian currency, triggering foreign outflows and further piling the pressure on the markets." The rupee weakened to a record low on the day, weighed down by persistent foreign outflows from domestic capital markets and global trade uncertainty. 

Foreign portfolio investors (FPI) have offloaded Indian shares worth $9.23 billion in 2025 so far. 

The broader, more domestically focussed smallcaps and midcaps dropped 0.3% and 1.3% respectively.

 

Food delivery and quick commerce platform Swiggy slid about 7% to a record low after reporting a wider loss in the third quarter.

Winemaker Sula Vineyards dropped 4.2% after posting a 35% slide in its December-quarter profit, hurt by a slowdown in urban consumption. 

Electronics distributor Redington climbed 6.4% after its quarterly profit rose, helped by a steady demand for computers and mobile phones.