The Reserve Bank of India Monetary Policy Committee (RBI MPC) has unanimously voted to reduce its repo rate by 25 bps to 5.25 percent, while the full year (FY26) GDP growth forecast revised sharply upward by 50 basis points to 7.30 percent.
The MPC also decided to continue with the neutral stance. However, Professor Ram Singh was of the view that the stance be changed from neutral to accommodative.
The rate cut and upward revision in economic growth forecast was on expected lines given the fall in CPI inflation and sharp growth in economic numbers in September 2025 quarter. The retail inflation dropped to a record low of 0.25 percent in October, while the GDP in Q2FY26 jumped to 8.2 percent.
The MPC noted that headline inflation has eased significantly and is likely to be softer than the earlier projections, primarily on account of the exceptionally benign food prices. Reflecting these favourable conditions, the projections for average headline inflation in FY26 and Q1FY27 have been further revised downwards to 2 percent and 3.9 percent, respectively.
"The RBI has gone all out to support India’s growth engine, which is currently among the strongest across large economies. India has truly stood the test of tariffs and geopolitical turmoil, and we can be proud of that," Umeshkumar Mehta, CIO at Samco Mutual Fund said.
With the USA also expected to ease monetary policy, the pressure on the Indian rupee will likely subside, thereby laying the foundation for the next phase of growth momentum, he believes.
According to Sujan Hajra, Chief Economist & Executive Director at Anand Rathi Group, if inflation continues to trend below the projected path, the possibility of another 25 bps cut cannot be dismissed. Overall, the policy actions are constructive for both the equity and bond markets, reinforcing a benign interest-rate environment and supporting valuations, he said.
Sonam Srivastava, Founder and Fund Manager at Wright Research PMS believes the markets are likely to read this as supportive rather than surprising since expectations for a cut had already strengthened after the recent CPI prints softened.
Rate sensitive sectors like banks, autos, and real estate can see near term strength, while equities more broadly should respond positively but remain stock-selective given widening earnings dispersion, according to her.
At 1:30 pm on December 5, the Nifty 50 rallied 158 points (0.61 percent) to 26,192, and the Bank Nifty soared 441 points (0.74 percent) to 59,729. Other rate sensitive sectors also reacted positively, rising between 0.5 percent to 1 percent.
After the final RBI MPC policy meeting of the current calendar year, Moneycontrol collated a list of 10 rate-sensitive stocks that can generate healthy returns in the short term:
Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors
Bajaj Auto | CMP: Rs 9,085
Bajaj Auto has been trading within a triangle formation since September 2025, indicating a phase of consolidation. At present, price action remains lacklustre, reflecting indecision in the daily trend. The ADX reading of 13, well below 25, further highlights the low-momentum environment.
A clear directional move is expected to emerge soon, for which the stock needs to give a decisive break above Rs 9,110, followed by Rs 9,250 levels. This would confirm a breakout from the triangle pattern and set the stage for a fresh rally towards the prior important resistance of Rs 9,400, followed by Rs 9,650 levels. On the downside, Rs 8,780 is the nearest support to watch out for.
Strategy: Buy
Target: Rs 9,250, Rs 9,400, Rs 9,650
Stop-Loss: Rs 8,780
IndusInd Bank | CMP: Rs 863
The banking sector has been one of the standout performers in recent times, with public-sector banks taking the lead. Going forward, private-sector banks are also expected to participate in the rally, and IndusInd Bank is trading near the breakout levels. The stock is currently trading above its 30-EMA, indicating a positive short-term structure.
However, prices are moving within a range of Rs 827 to Rs 873. A decisive move above Rs 873 can trigger renewed bullish momentum and drive the stock towards Rs 907, followed by Rs 940. On the downside, immediate support lies at Rs 840. A breakdown below this level may drag the stock back towards Rs 827, which also coincides with important EMA support.
Strategy: Buy
Target: Rs 907, Rs 940
Stop-Loss: Rs 840
PB Fintech | CMP: Rs 1,854.3
On the daily chart, after witnessing an almost 13 percent fall since September 5, PB Fintech took support near the Rs 1,630 level and has reversed on the upside in the form of a higher high and higher low, following Dow Theory.
Prices are now on the verge of giving a breakout of the rounding-bottom pattern, which is considered to be a bullish sign. A daily close above Rs 1,880 can confirm a breakout of the said pattern, which can push prices higher towards Rs 1,955, followed by Rs 2,030, with key support at Rs 1,805.
Strategy: Buy
Target: Rs 1,955, Rs 2,030
Stop-Loss: Rs 1,805
Vidnyan Sawant, Head of Research at GEPL Capital
Axis Bank | CMP: Rs 1,280
Axis Bank, on the weekly scale, continues to sustain firmly above the breakout zone of the falling trendline around the Rs 1,200 level. Its position above the key weekly EMAs reinforces a positive trend structure and underlying bullish sentiment. On the daily scale, the stock has been forming a consistent pattern of higher tops and higher bottoms, indicating a healthy uptrend.
Historically, the stock has shown that its corrective phases tend to bottom out around an average decline of 4 percent. The most recent pullback has also completed near this typical correction zone, suggesting that the stock may now be poised to resume its upward trajectory. The RSI, currently at 68, further strengthens the bullish outlook, signalling sustained momentum and buyers’ dominance.
Strategy: Buy
Target: Rs 1,367
Stop-Loss: Rs 1,233
TVS Motor Company | CMP: Rs 3,646.4
TVS Motor continues to display a strong technical structure on the weekly timeframe, maintaining a sequence of higher tops and higher bottoms, which reaffirms the ongoing uptrend. The price is comfortably trading above the 12-week EMA, indicating sustained bullish strength and healthy trend alignment across timeframes.
From a momentum perspective, the RSI on both the weekly and daily charts remains above the 60 mark, signalling strong underlying momentum and confirming that buyers are firmly in control. This behaviour typically reflects a robust and sustained trend phase, suggesting that any dips may continue to attract buying interest.
Strategy: Buy
Target: Rs 4,010
Stop-Loss: Rs 3,515
Rupak De, Senior Technical Analyst at LKP Securities
Bajaj Finance | CMP: Rs 1,029
Bajaj Finance appears to be attracting buying interest lately, as it has managed to hold above the recent low on the daily chart. The price has also reclaimed the 21-EMA on the daily timeframe. The RSI is in a bullish crossover, indicating strengthening momentum.
In the short term, the trend may remain positive, with the stock potentially rising towards Rs 1,150. On the lower end, support is placed at Rs 1,018, below which the stock may slip into consolidation.
Strategy: Buy
Target: Rs 1,150
Stop-Loss: Rs 1,018
State Bank of India | CMP: Rs 948.1
State Bank of India has slipped below its recent consolidation, heightening bearish sentiment around it. In addition, the stock has fallen below important moving averages, confirming a bearish trend. It appears that the stock may continue to witness significant profit-taking before any pause.
Momentum also looks weak in the short term. The trend is likely to remain soft, with the price potentially falling towards Rs 921. On the higher end, resistance is placed at Rs 970. Hence, sell SBI around Rs 955.
Strategy: Sell
Target: Rs 921
Stop-Loss: Rs 970
Mahesh M Ojha, VP Research & Business Development at Kantilal Chhaganlal Securities
ICICI Bank | CMP: Rs 1,386.7
Consolidation is visible on the chart, yet ICICI Bank maintains a bullish bias by closing above its 10-, 20-, and 50-day moving averages. This positioning signals potential for further upside towards Rs 1,404 – Rs 1,420 – Rs 1,450 levels. A stop-loss for long positions should be placed below Rs 1,335 on a daily-closing basis.
Strategy: Buy
Target: Rs 1,404, Rs 1,420, Rs 1,450
Stop-Loss: Rs 1,335
Mahindra and Mahindra | CMP: Rs 3,671.6
Consolidation is visible on the chart, yet M&M maintains a bullish bias by trading above its 10-, 20-, and 50-day moving averages. This positioning signals potential for further upside towards Rs 3,750 – 3,790 – 3,850 – 3,880 levels. A stop-loss should be placed at Rs 3,620 on a daily-closing basis.
Strategy: Buy
Target: Rs 3,750, Rs 3,790, Rs 3,850, Rs 3,880
Stop-Loss: Rs 3,620
Punjab National Bank | CMP: Rs 119.53
PNB is moving in a broader uptrend. Currently, the stock has shown consolidation on the chart. A close above Rs 120 will signal a continued bullish outlook. We anticipate further upside towards Rs 124 – Rs 128 – Rs 135 – Rs 140+.
Strategy: Buy
Target: Rs 124, Rs 128, Rs 135, Rs 140
Stop-Loss: Rs 112
Rajesh Bhosale, Technical Analyst at Angel One
Phoenix Mills | CMP: Rs 1,734.1
Phoenix Mills continues to display notable relative strength compared to its peers, many of which are trading near their 52-week lows. The stock maintains a higher-top higher-bottom structure, reflecting a steady bullish trend.
On the daily chart, prices are holding firmly above the 20-DEMA and are approaching a potential continuation breakout. Moreover, RSI readings across multiple timeframes remain above 60, reinforcing the positive momentum and bullish sentiment in the stock. Hence, we recommend buying Phoenix Mills around Rs 1,735 – 1,725.
Strategy: Buy
Target: Rs 1,880
Stop-Loss: Rs 1,660
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.