News

The Reserve Bank of India (RBI) will announce its monetary policy decision later on Friday, February 6, 2026, with markets closely tracking the outcome of the sixth and final bi-monthly meeting of the Monetary Policy Committee (MPC) for FY26.

The three-day meeting of the six-member MPC, chaired by RBI Governor Sanjay Malhotra, began on February 4 and concludes today. The repo rate decision will be announced at 10:00 am, followed by the Governor’s policy statement.

The February MPC meeting comes at a crucial juncture, following the Union Budget for 2026–27 and the recent announcement of the India–US trade deal.

The RBI has already reduced the repo rate by a cumulative 125 basis points since February 2025, including a 25 basis point cut in the December policy, when the benchmark rate was lowered to 5.25 per cent from 5.50 per cent. The central bank had also retained a ‘neutral’ stance at its previous meeting.

Market participants widely expect the MPC to keep the repo rate unchanged at 5.25 per cent in today’s policy. With growth and inflation dynamics remaining favourable, the focus is likely to remain on liquidity management, policy transmission and forward guidance.

Over the past quarter, the RBI has infused liquidity through Variable Rate Repo (VRR) operations and Open Market Operations (OMOs). Markets will closely monitor the Governor’s commentary on the continuity and scale of these measures, particularly in the context of the government’s gross borrowing programme for FY27.

Against this backdrop, several sectors and stocks are expected to remain in focus during the trading session.

Banking and financial stocks are among the key segments to watch, as they are directly impacted by interest rate policy and liquidity conditions. Large private sector banks such as HDFC Bank, ICICI Bank and Axis Bank are expected to see heightened activity.

Public sector lenders, including State Bank of India, Bank of Baroda and Punjab National Bank, may also remain in focus, especially on any indications related to liquidity support or transmission of earlier rate cuts.

Among non-banking financial companies, stocks such as Bajaj Finance, Bajaj Finserv, Shriram Finance and Cholamandalam Investment and Finance could react to policy cues.

Auto stocks may attract attention, as lower interest rates and supportive liquidity conditions tend to aid vehicle demand through improved financing conditions. Companies such as Maruti Suzuki India, Tata Motors, Mahindra & Mahindra, Hero MotoCorp, Bajaj Auto and TVS Motor Company are likely to be watched closely by market participants.

Real estate stocks are another rate-sensitive segment that could remain in focus. Developers such as DLF, Prestige Group, Godrej Properties, Oberoi Realty and Phoenix Mills may react to any signals on borrowing costs and liquidity availability, which influence housing demand and project financing.

Infrastructure and capital goods stocks may also see activity, given the linkage between liquidity conditions, government spending and borrowing. Stocks such as Larsen & Toubro, Siemens, ABB India and Cummins India are expected to be monitored closely, particularly in the context of the Union Budget and the government’s borrowing calendar.

Information technology stocks, including TCS, Infosys, Wipro, HCL Technologies and Tech Mahindra, may react indirectly to macro cues, currency movement and global outlook commentary, even though the sector is less sensitive to domestic interest rate changes.

Consumption-oriented stocks, such as Hindustan Unilever, ITC, Nestle India and Britannia Industries, could also remain in focus, as liquidity conditions and inflation trends influence consumer demand.

The RBI’s Monetary Policy Committee (MPC), the six-member rate-setting panel, is widely expected to keep repo rates unchanged at 5.25 per cent, with focus likely to remain on liquidity management and transmission.