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The Day the RBI Speaks | Banking Stocks in Focus

RBI Governor Sanjay Malhotra is set to announce the MPC decision this morning, with economists and market participants overwhelmingly expecting the repo rate to be held unchanged at 5.25 per cent, while retaining the neutral policy stance. The central bank has already cut rates by a cumulative 125 basis points in 2025 — its largest annual easing cycle since 2019 — and has kept rates on hold across the last three meetings since then. Market attention will therefore be focused more on RBI's commentary than on the rate decision itself — particularly its assessment of inflation risks, liquidity conditions and the external environment. Retail inflation has risen to 4.38 per cent in June, above the RBI's 4 per cent medium-term target, while crude oil near $85 and ongoing West Asia tensions complicate the central bank's calculus. For banking stocks, the calculus is straightforward. A status quo with a hawkish tilt on inflation hurts rate-sensitive banks. A neutral-to-dovish commentary on liquidity supports them. Bank Nifty fell 340 points to 57,907 on Tuesday — making it one of the more sensitive barometers to watch the moment Governor Malhotra begins speaking this morning. Immediate support for Nifty sits at 24,400-24,500, with selling pressure seen near 24,500 in yesterday's session. A clean RBI outcome either way could be the catalyst that resolves this range decisively.