New Delhi, Aug. 5 -- The Reserve Bank of India's (RBI) decision to maintain the policy repo rate at 5.25 per cent and retain its neutral monetary policy stance is expected to support market sentiment in the near term, though economists believe the long-term outlook for equities will continue to depend on corporate earnings growth, investment activity and sustained domestic inflows.

Commenting on the policy, Sujan Hajra, Chief Economist and Executive Director at Anand Rathi Group, said, "RBI has paused, but it is not yet at ease. By holding the repo rate at 5.25% and retaining a neutral stance, the MPC has signalled that growth remains resilient, while the room for further easing has narrowed."

According to Hajra, an uneven monsoon, food...