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Explore key highlights and market trends influenced by RBI's latest policy changes
With the banking stocks moving up on the wave of RBI policy support, Indian stock markets are showing solid gains. Banks, metals, and macroeconomic stability have given rise to good sentiments in the broader market.
Market Overview
The BSE Sensex gained 351 points to close at 79,759.86. The Nifty 50 also moved up 102 points to settle at 24,227.95. Across-the-board gainers saw most sectors finish in the green, especially in financials, metals, and mid-cap stocks that kept the bullish momentum going.
Mid-cap and small-cap indices rallied with large-cap benchmarks, gaining over 1.1% each. The positive spaciousness showed that both retail and institutional investors participated, thereby building solid confidence in the underlying strength of the Indian economy.
Liquidity Triggers Rally in Financials
Liquidity-friendly monetary changes initiated by the Reserve Bank of India (RBI) during the week gave the primary impetus to this market rally. The central bank now requires that the maintenance reserve on digitally-linked deposits be lowered to 2.5%, from 5% in the past. Likewise, it also lowered the rate of 'run-off' on wholesale deposits from non-financial entities to 40%.
These measures were aimed at relieving liquidity stress for banks so that they could lend freely to the economy. Therefore, a number of banks high on wholesale deposits gained jolts in the session. Strong performances were noted for Kotak Mahindra Bank and HDFC Bank, which were up 2.3% and 2.1%, respectively.
The Bank Nifty gained 1.6%, surpassing the broader indices. Financial stocks led the day with improving sentiments around credit growth and capital adequacy expectations.
IndusInd Bank Dips on Forensic Audit Concerns
With all the positive momentum around the sector, IndusInd Bank shares fell by almost 4% after reports of a second forensic audit. This audit was commissioned to investigate ₹6,000 crore worth of interest income calculations that were presumably misstated in respect of the bank's microfinance portfolio.
This raised concerns regarding internal financial reporting controls and risk management practices at the bank. Therefore, traders exercised caution in a generally favorable environment for banking shares, resulting in massive sell-offs in the stock.
Metal Sector Gets a Boost with Provisional Safeguard Duty Imposition
The metal sector advanced by over 1% following the government's announcement of 12% provisional safeguard duty on selected steel imports. This policy measure was intended to safeguard domestic steel producers from the influx of cheaper Chinese steel products that had been undercutting Indian prices in recent months.The move was welcomed by domestic steelmakers, many of whom had lobbied for trade protections. Stocks of companies such as Tata Steel, JSW Steel, and Jindal Steel saw renewed buying interest, reflecting optimism regarding improved pricing power and higher margins in the coming quarters.
Currency Market Stable Despite Mixed International Cues
The Indian rupee traded flat at 85.13 to the U.S. dollar, showing resilience amid fluctuations in global currency markets. Foreign Portfolio Inflows continued to support the currency, both on the equity and debt side. Weaker Chinese yuan and sentiment, being mixed international, added to the caution around the U.S. Federal Reserve's next policy move.
Such constant stabilitytrade of the rupee will further comfort equity investors, including those with exposure to such sectors that are sensitive to the currency movement, such as IT, oil & gas, and metals.
On the Block: Strategic Acquisitions
Said that in corporate news, asset management company 360 ONE WAM acquired UBS's Indian onshore wealth management business in a deal worth ₹3,070 crores, making it one of the biggest wealth management consolidations in recent years.
As per the strategic agreement, UBS would take warrants for a 4.95% stake in 360 ONE worth approximately ₹1,900 crore. The partnership would enable UBS to leverage 360 ONE's rich domestic network while offering high-net-worth clients global investment solutions through the Swiss banking giant's platform.
Analysts and investors received the announcement well, viewing the acquisition as a precursor to further service integration and efficiency in the use of capital.
Sector Performance Snapshot
- Banking and Financials: Were the star performers, riding the RBI wave of liquidity support onto that high wave.
- Metals: Rallied owing to protectionism, pushing large-cap metal stocks higher up.
- Pharma and IT: Had an unimpressive trading session with a poor news flow, although a select few stocks continued to be favored due to defensive buying.
- Auto and FMCG: Neither rose nor fell with fractional increases due to neutral cues sectorally and limited volume participation.
Market Outlook and Trigger Points Ahead
The outlook in the market henceforth remains hopeful keeping in view the supportive monetary policy, improving visibility of results for corporate earnings, and positive domestic macro indicators. But many influencing factor types will act upon the trend in the short- to mid-term: Corporate Earnings: With this week seeing the onset of the Q4 FY'25 earnings season, large-cap corporates in banking, IT, and auto are expected to announce their results later this week. RBI Comment: Further policy implementation and liquidity management updates will continue to draw focus. Global Macro Developments: Investors continue to track U.S. inflation data, Federal Reserve policy commentary, and crude oil price trends. Domestic Economic Indicators: GDP numbers are set to come out soon for those on GST collections, PMI indices, and industrial production.
The Indian stock market on April 22, 2025, reflected a positive and upbeat posture among the investors, highlighted by favorable policy changes coupled with selective strength in sectors. While banks and metals led the charge, a few isolated counters like an IndusInd Bank were neutralized.
Stable currency conditions, encouraging developments in the wealth management space, and proactive moves by the central bank laid the groundwork for continued upward momentum. With corporate earnings and macro data expected to take center stage in the coming weeks, the market trajectory will depend heavily on how these factors align with current investor expectations.
Continued sectoral rotation, institutional flows, and strategic government measures are likely to shape the near-term direction of Indian equity markets.