Canara, BOB, SBI extend losses; realty stocks fall as growth worries weigh

The Reserve Bank of India (RBI) reducing the repo rate by 25 basis points could not cheer the market, with the benchmark indices Sensex and Nifty extending losses, as growth concerns weighed on sentiment, thanks to a cut in FY26 GDP projection.  Rate-sensitive counters such as banking and real estate also declined, as the RBI changed its policy stance to 'accommodative' to 'neutral'.

The stock fell as the RBI suggested that clouds over global growth due to trade restrictions will also impede local growth, as it trimmed its FY26 GDP growth estimate to 6.5 per cent from 6.7 per cent. The RBI governor said global tariff uncertainties could lead to some pressure on rupee and higher imported inflation, which is an upside risk to inflation.

"The RBI’s MPC has cut the repo rate by 25 basis points to 6 per cent, shifting its stance to accommodative to support economic growth amidst global uncertainties. Additionally, the RBI has  reduced its GDP growth projection to 6.5 per cent due to external challenges like US tariffs. Balancing growth and inflation is crucial, especially as global economic conditions remain volatile, with the US 10-year Treasury yield surging past 4.5 per cent, indicating hardened yields. This environment complicates the RBI’s task of managing economic stability while responding to global economic shifts," said Narinder Wadhwa, MD & CEO of SKI Capital Services.

Among banking names, Bank of Baroda (BoB) dropped 1.4 per cent to Rs 232.50. Canara Bank, State Bank of India (SBI), IndusInd Bank and YES Bank declined 1.23 per cent, 1.11 per cent, 0.68 per cent and 0.52 per cent, respectively. Only HDFC Bank from the BSE Bankex gained. It edged 0.15 per cent higher at Rs 1,771.80. The BSE Bankex was down 0.4 per cent at 57,759.24.

Among real estate stocks, The Phoenix Mills tanked 4.34 per cent to Rs 1,502. Anant Raj, Oberoi Realty, Sobha, Macrotech Developers and DLF fell 1-4 per cent.

"Lower interest rates will make home loans more affordable, enhancing the purchasing power of potential homebuyers and stimulating demand across various segments of the real estate market," said Manju Yagnik, Vice Chairperson of Nahar Group and Senior VP, NAREDCO, Maharashtra.

The RBI Governor Sanjay Malhotra said that the central bank was alert on emerging global developments. He said the US dollar has weakened, crude oil prices have gone down, and markets have been on tenterhooks due to the tariff announcements.

"Going forward, in the absence of any shocks, the MPC is considering only two options, i.e., status quo or rate cut," Malhotra mentioned.

He mentioned that India's economy has made steady progress on inflation and growth while weathering global uncertainties. "Going forward, in the absence of any shocks, the MPC is considering only two options, i.e., status quo or rate cut," Malhotra mentioned.