The key equity indices ended with decent gains today, extending their winning run to a second straight session. Sentiment improved after the Reserve Bank of India cut the repo rate by 25 basis points to 5.25%. The Nifty regained momentum and closed above 26,150, rebounding from an intraday low of 25,985.35, with banks and financial services stocks leading the upmove. Traders also kept an eye on Friday's US PCE inflation data, a key indicator for shaping the US Federal Reserve's policy outlook.
The S&P BSE Sensex advanced 447.05 points or 0.52% to 85,712.37. The Nifty 50 index added 152.70 points or 0.59% to 26,186.45. In the past two trading sessions, the Nifty and Sensex declined 0.77% and 0.71%, respectively.
SBI (up 2.46%), Bajaj Finserv (up 2.08%) and Bajaj Finance (up 1.89%) boosted the indices today.
The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index declined 0.19% and the S&P BSE Small-Cap index fell 0.32%.
The market breadth was negative. On the BSE, 1,805 shares rose and 2,342 shares fell. A total of 191 shares were unchanged.
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, dropped 4.64% to 10.32.
RBI MPC Outcome:
The Reserve Bank of India Governor Sanjay Malhotra, announcing the fifth bi-monthly policy review of FY26 said that RBI's MPC has unanimously decided to reduce the policy repo rate by 25 basis points to 5.25%, keeping its stance neutral.
The MPC voted unanimously to reduce the rate under the liquidity adjustment facility, which also revised the standing deposit facility (SDF) rate to 5% and the marginal standing facility (MSF) and Bank Rate to 5.50%, while maintaining a neutral stance.
The RBI raised its real GDP growth forecast for FY26 to 7.3% from 6.8% earlier, expecting 7% growth in Q3 and 6.5% in Q4. For Q1 and Q2 FY27, growth is projected at 6.7% and 6.8%, respectively.
The CPI inflation forecast for FY26 was lowered to 2% from 2.6%, with expectations of 0.6% in Q3 and 2.9% in Q4. CPI for Q1 and Q2 FY27 is projected at 3.9% and 4%.
The MPC noted that headline inflation has eased sharply due to exceptionally benign food prices, while core inflation has softened and is expected to stay anchored near the 4% target in the first half of FY27.
The committee said the balance between growth and inflation continues to offer policy space to support economic momentum.
The minutes of the meeting will be published on 19 December, and the next MPC meeting will be held from 4 to 6 February 2026.
Numbers to Track:
The yield on India's 10-year benchmark federal paper declined 0.18% to 6.519 compared with previous session close of 6.531.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 89.9250 compared with its close of 89.8950 during the previous trading session.
MCX Gold futures for 5 February 2025 settlement rose 0.46% to Rs 130,675.
The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.08% to 98.98.
In the commodities market, Brent crude for January 2025 settlement rose 2 cents or 0.03% to $63.28 a barrel.
Global Markets:
Most European shares advanced on Friday, while Asian markets ended mixed, as Wall Street finished largely flat. Investors weighed growing expectations of a Federal Reserve rate cut ahead of next week's Fed policy decision.
US equities ended largely unchanged overnight, supported by firm bets that the Fed will ease policy next week while investors await a key inflation reading. The Dow Jones Industrial Average slipped 0.07%, the S&P 500 rose 0.11% and the NASDAQ Composite added 0.22%.
The probability of a 25-basis-point cut at the Fed's December 9-10 meeting has risen, with futures now pricing in about an 87% chance.
Fresh labour data added to the uncertainty. Weekly jobless claims fell sharply by 27,000 to a seasonally adjusted 191,000, the lowest since September 2022, though holiday-related distortions may have amplified the decline. Earlier in the week, ADP reported a 32,000 drop in private-sector payrolls, the steepest fall in more than two and a half years. Challenger, Gray & Christmas noted that announced job cuts dropped sharply in November, although hiring plans remained subdued.
These indicators arrive against the backdrop of an unprecedented 43-day government shutdown that postponed the Bureau of Labor Statistics' official jobs report, now expected only after the Fed's policy decision.
In corporate news, Hewlett Packard Enterprise shares fell 9% in after-hours trade after the company missed fourth-quarter revenue expectations, reporting $9.68 billion against the consensus estimate of $9.94 billion.
Stocks in Spotlight:
Hindustan Unilever fell 3.51% to Rs 2339 as the stock adjusted for the demerger of its ice-cream business into Kwality Wall's (India) Limited (KWIL). The record date for the separation is today, 5 December 2025, and HUL shares are now trading ex-ice-cream business. Eligible shareholders will receive one KWIL share for every HUL share held, in line with the 1:1 entitlement ratio.
Kaynes Technologies slumped 12.45% after a domestic brokerage flagged mismatches in related-party disclosures across the company and key subsidiaries. The gaps involved large transactions and year-end balances with Iskraemeco and Kaynes Electronics Manufacturing. Kaynes later clarified the omissions were in standalone accounts, have been corrected, and that consolidated statements remain compliant.
Kesoram Industries surged 19.85% after Frontier Warehousing announced an open offer to acquire 8.07 crore shares, representing a 26% stake, at Rs 5.48 per share. The offer was triggered after Frontier Warehousing entered into a share purchase agreement with Kesoram's promoter-group entities to acquire 13,29,69,279 equity shares at Rs 4 per share. This block represents 42.8% of Kesoram's voting share capital.
Tenneco Clean Air India shed 0.02%. The company reported 10% increase in consolidated net profit to Rs 150.49 crore on 9.58% rise in revenue from operations to Rs 1,280.64 crore in Q2 FY26 over Q2 FY25.
Z-Tech (India) added 2.39% after the company announced that it has secured new urban development projects worth Rs 7.09 crore from the Municipal Corporation of Delhi (MCD).
Lupin fell 0.27%. The company announced that it has received tentative approval from the U.S. Food and Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) for Siponimod Tablets in 0.25 mg, 1 mg and 2 mg.
ZEN Technologies gained 1% after the company announced that it has secured orders worth Rs 120 crore from the Ministry of Defence (MoD), Government of India. In a regulatory filing, the company said the orders pertain to the supply of a Comprehensive Training Node (CTN), which includes a suite of various training simulators and related equipment. The project is scheduled to be completed within one year.
Niraj Cement Structurals dropped 0.94% after the company bagged two orders aggregating Rs 164.18 crore from the Mumbai Metropolitan Region Development Authority (MMRDA) and the Northeast Frontier Railway.
IPO Update:
Meesho received bids for 21,95,29,86,255 shares as against 27,79,38,446 shares on offer, according to stock exchange data at 16:39 IST on Friday (5 December 2025). The issue was subscribed 78.99 times. The issue opened for bidding on 3 December 2025 and it will close on 5 December 2025. The price band of the IPO is fixed between Rs 105 and 111 per share.
Aequs received bids for 4,26,44,08,800 shares as against 4,20,26,913 shares on offer, according to stock exchange data at 16:39 IST on Friday (5 December 2025). The issue was subscribed 101.47 times. The issue opened for bidding on 3 December 2025 and it will close on 5 December 2025. The price band of the IPO is fixed between Rs 118 and 124 per share.
Vidya Wires received bids for 1,14,78,20,256 shares as against 4,33,34,009 shares on offer, according to stock exchange data at 16:39 IST on Friday (5 December 2025). The issue was subscribed 26.49 times. The issue opened for bidding on 3 December 2025 and it will close on 5 December 2025. The price band of the IPO is fixed between Rs 48 and 52 per share.
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