Archive · 7 Dec 2025
RBI Rate Cut Boosts Indian Stock Market
The Indian stock market went up on Friday because the Reserve Bank of India (RBI) decided to lower the interest rate, which makes borrowing cheaper.
This is good for banks, people who want to buy homes or cars, and the overall economy.
The Sensex and Nifty 50, which are like report cards for the stock market, both went up.
Some experts think this could lead to more gains, but others are cautious because of upcoming events like the US Federal Reserve's decision.
One expert, Dharmesh Shah, suggested buying shares of Larsen & Toubro, a big construction company, because he thinks the price will go up.
Overall, the market is doing well, but there are some things to watch out for in the coming weeks.
The Indian stock market rose on Friday following the RBI's decision to lower the policy repo rate by 25 basis points to 5.25%.
The Sensex closed at 85,712.37, gaining 447.05 points or 0.52%, while the Nifty 50 reached 26,186.45, up by 152.7 points or 0.59%.
Reduced interest rates lower the cost of borrowing, stimulating loan demand and decreasing funding expenses, which benefits both banks and non-bank lenders.
Dharmesh Shah of ICICI Securities recommends buying Larsen & Toubro shares in the range of ₹3,980-4,050 with a target price of ₹4,520 and a stop loss of ₹3,798.
The market outlook is mixed, with some experts predicting a challenge to the All Time High of 26,300 and others cautioning about prolonged consolidation amid volatility.
- Who
- Reserve Bank of India (RBI), Dharmesh Shah (ICICI Securities)
- What
- RBI's decision to lower the policy repo rate and market outlook
- When
- Friday, with a weekly review and future outlook
- Where
- India
- Why
- To analyze the impact of the RBI's rate cut on the stock market and provide investment recommendations
Optimistic View
Cautious View
Market Outlook
Optimistic View
The market is expected to challenge the All Time High of 26,300 and potentially reach 26,800 in the coming weeks due to elevated buying demand and a dovish RBI stance.
Cautious View
A lack of follow-through strength above 26,300 could result in prolonged consolidation in the 26,300-25,700 range amid elevated volatility ahead of the upcoming Fed policy and inflation print.
- Sensex Closing
- 85,712.37
- Sensex Gain
- 447.05 points or 0.52%
- Nifty 50 Closing
- 26,186.45
- Nifty 50 Gain
- 152.7 points or 0.59%
- Repo Rate Cut
- 25 basis points to 5.25%
- Stock Recommendation
- Buy Larsen & Toubro in the range of ₹3,980-4,050 with a target of ₹4,520 and a stop loss of ₹3,798
Sources
Stable global crude prices, GST rate cuts to check inflation in FY27
Economy to grow by 7% or more in FY26, says Nirmala Sitharaman
Stocks to buy or sell: Dharmesh Shah of ICICI Sec suggests buying Larsen & Toubro shares on 8 December 2025
CPI print, India-Russia deals to US Fed meet: Top five triggers for Indian stock market this week
