Tale of the Tape 

Hi ya’ll. Happy Friday!

Nifty (+1%) and Sensex (+0.9%) zoomed after the RBI surprised everyone with a big rate cut bazooka. FYI - read our top story below to get the complete lowdown. Midcaps (+1.2%) and Smallcaps (+0.8%) joined the party too. The advance-decline ratio was in favour of the bulls (3:2).

Most sectors ended in the green. Metals (+1.9%), Auto (+1.5%) and Banks (+1.5%) were the top gainers.

This AI stock could see a +37% upside over the next year. More details below.

Tata Motors was in focus after JPMorgan downgraded the stock and reduced its target price to Rs 740 p/sh vs Rs 1,250 p/sh earlier.

Block deals. Bajaj Finserv was up +2% after 2.86 cr shares (1.79% equity) changed hands in a big deal; the promoters were the likely sellers. ZF Commercial was in focus after 6 lakh shares (3.17% equity) were traded in a big deal; the promoters again were the likely sellers.

Muthoot Finance (+7%) and Manappuram Finance (+6%) gained on the RBI’s relief for small gold loans.

Gravita India rallied +4% intraday after reports suggested the GOI was ready to roll out a domestic recycling scheme for critical minerals.

Tata Investment (+3%) was up on reports of SEBI getting ready to approve Tata Capital’s IPO.

Economy
RBI - Not All Heroes Wear Capes

The Reserve Bank of India surprised EVERYONE today with a jumbo rate cut + major liquidity boost! FYI - the central bank reduced the repo rate by 50 bps to 5.5%, which is the lowest in three years. To top things off, it also threw in another liquidity boost by cutting the cash reserve ratio -- the amount of deposits that banks need to keep with the RBI - by 100 bps to 3%.

Overall, great measures that will perk up the economy and also lower your EMIs on everything from cars to homes. Sectors like autos, housing finance, real estate, and banks are likely to benefit from today’s decisions as it would encourage spending or borrowing. IDFC First Bank, DLF and PNB Housing Finance rallied between 5% to 7% each.

RBI governor Sanjay Malhotra specifically noted that inflation was low and it was the MPC’s duty to “stimulate domestic private consumption and investment”. PS - the RBI also lowered its inflation outlook for FY26 to 3.7% while maintaining its GDP forecast at 6.5%. Malhotra also confirmed that the loan to value ratio for gold loans will be revised downwards. This is a HUGE positive for Manappuram Finance and Muthoot Finance; up 3-6% each.

Big Picture: So far so good. The RBI expects its rate cuts to lift up growth by H2-2025. But the debate is already shifting to how much more ammo it has in its tank. Malhotra said today’s decision was “frontloading” rate cuts and that the MPC’s stance shifted to ‘neutral’ from ‘accomodative’. While Nomura says there’s unlikely to be more rate cuts, others are projecting another 25 bps cut in August. FWIW - Malhotra made it clear that India’s aspiration should be 7%-8% growth, so we’ll see how far he goes!

Specials
Best Stocks To Buy Now

Markets are less than 5% away from new all-time highs! Experts say this may be one of the best times to build your portfolio. Here are 5 midcap & smallcap stocks that you must absolutely not miss!