Rate sensitive stocks rise: Realty, banks, others gain on RBI's 25 bps rate cut announcement

Realty, bank stocks rise amid RBI policy rate cut announcement. 

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26 Aug, 2025 12:21

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The realty, banking, auto and non-banking financial shares rose in Friday’s trade after the Reserve Bank of India (RBI) cut the repo rate by 25 basis points to 5.25 percent in its fifth bi-monthly monetary policy of the current financial year. The move comes as the economy posted a six-quarter high growth of 8.2 percent in the second quarter.

Announcing the policy, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) voted unanimously to lower the short-term lending rate while maintaining a neutral stance, despite concerns over the rupee’s depreciation. The rate cut lifted investor sentiment across realty, auto, banking and NBFC stocks.

Nifty Realty was the top sectoral gainer, rising up to 1.3 percent, with eight of its 10 constituents trading higher. Lower interest rates make home loans cheaper, supporting housing demand and aiding real estate developers. Prestige Estates Projects and DLF were among the major gainers, rising 2.25 percent and 2.07 percent, respectively.

Oberoi Realty, Macrotech Developers, Godrej Properties and Sobha advanced up to 2 percent.

Pankaj Jain, Founder and CMD, SPJ Group, said "At a time when the real estate sector is growing exponentially, the RBI bringing the repo rate to 5.25% will give a major boost to the sector. Lower borrowing costs will make home loans more affordable, thereby encouraging more buyers to enter the market. Alongside, the move offers a stronger case for developers to expand into untapped micro-markets. Entering 2026, we foresee a more balanced, demand-driven ecosystem where both residential and commercial segments grow in tandem."

Nifty Financial Services climbed 0.8 percent, while the Bank Nifty and PSU Bank indices gained 0.5 per cent and 0.8 percent, respectively. Lower borrowing costs typically boost loan demand and ease funding pressures for banks and non-bank lenders.

Shriram Finance and SBI Cards and Payment Services rose up to 3 percent in the Financial Services index, while Punjab National Bank and State Bank of India led gains in the Bank Nifty.

In the NBFC pack, Bajaj Finance and Muthoot Finance rose up to 2 percent.

More affordable credit also supports purchases of vehicles, aiding auto companies. The auto index, another rate-sensitive segment, edged up 0.5 percent.