On June 6, 2025, the Indian stock market witnessed a significant upswing as the Reserve Bank of India (RBI) announced a 50 basis points (bps) cut in the repo rate, bringing it down to 5.5%. This unexpected move by the RBI’s Monetary Policy Committee (MPC) aimed to stimulate economic growth amidst global uncertainties
Market Snapshot
Sensex: Rose by 443.79 points to close at 81,442.04.
Nifty50: Gained 130.70 points, ending at 24,750.90.
The broader markets also showed positive momentum, with the Nifty Midcap 150 and Nifty Smallcap 250 indices advancing by 0.28% and 0.47%, respectively
Key Factors Influencing the Market
1. RBI’s Surprise Rate Cut
The RBI’s decision to cut the repo rate by 50 bps was more aggressive than the anticipated 25 bps, signaling a strong commitment to boosting economic activity. This move marked the third consecutive rate cut in 2025.
2. Sectoral Gains
Sectors such as realty, PSU banks, and metals led the rally. The Nifty Realty index surged over 2.3%, driven by stocks like Godrej Properties and DLF. The Nifty PSU Bank index also rose over 1%, with notable gains in Punjab & Sind Bank and Bank of India.
3. Global Market Cues
Positive trends in Asian markets, including gains in Tokyo’s Nikkei and South Korea’s Kospi, contributed to the optimistic sentiment on Dalal Street.
Sectoral Performance
Realty: Nifty Realty index up by 2.3%.
PSU Banks: Index rose over 1%.
Metals: Nifty Metal index gained 0.6%.
Financial Services: Experienced slight declines, with the Nifty Financial Services index down by 0.23%.
💡 Expert Insights
Market analysts view the RBI’s rate cut as a proactive measure to support economic growth. The central bank’s shift from an “accommodative” to a “neutral” stance indicates a balanced approach to managing inflation and growth.
📰 Current Affairs Impacting the Market
RBI Policy Decision: The central bank’s unexpected 50 bps rate cut boosted market confidence.
Bengaluru Stampede Aftermath: Investigations continue into the tragic stampede during the RCB victory parade on June 4, with authorities taking action against event organizers.
Global Trade Developments: Ongoing discussions between major economies have led to cautious optimism in global markets.
📅 Looking Ahead
Investors should monitor upcoming economic data releases and global market trends. The RBI’s policy shift may influence investment strategies, particularly in rate-sensitive sectors. Staying informed about corporate developments and sectoral shifts will be crucial for making informed investment decisions in the coming days.
