Indian benchmark indices continued their bullish run on the second straight day today, with the Nifty 50 & Sensex both posting strong gains, boosted by strong global cues & the continuing positive mood following the Reserve Bank of India (RBI)’s aggressive monetary policy action taken on Friday. The Nifty closed above the important resistance level of 25,100, finishing at 25,132, and the Sensex rose by 383 points to close at 82,572.
The rally was mostly supported by the RBI’s unexpected 50 basis points (bps) reduction in the repo rate to 5.5% on June 6, 2025, the third consecutive cut this year. This “jumbo rate cut,” as analysts called it, along with a massive 100 bps cut in the Cash Reserve Ratio (CRR) effective in phases until November 2025, will add a huge liquidity (almost ₹2.5 trillion) to the financial system. With this move, the central bank reiterates its strong determination to continue supporting the growth of the economy, despite a good inflation outlook of 3.7% for FY26.
Market Movers & Shakers
Rate-sensitive sectors were the biggest winners from this pro-growth posture. Banking, financial services, and auto stocks were ushered the way, with three of the big seven crosses making massively positive returns. Bajaj Finance was up 3.69 percent, while Kotak Mahindra Bank and Axis Bank were the other large gainers, up healthy percentage points. The Nifty Realty index, a direct beneficiary of lower borrowing costs, soared some 16%.
The overall market saw some profit booking in select sectors. Several recent individual stock leaders in Power and some capital goods firms corrected after impressive recent runs. Investors are especially focused in these early days on earnings reports from specific companies, with each earnings report more likely to play an outsized role in a given stock’s movement over the next few days.
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Support from positive cues from global peers added to the street’s enthusiasm. Asian markets opened on a bullish note, largely due to positive American economic indicators and calmed speculation about possible future trade negotiations between the US and China. Japan’s Nikkei 225 and South Korea’s Kospi indices jumped, signaling investor optimism on the prospect of further softening of trade tensions. European stocks rallied, too, bolstered by headlines from a new U.S.-UK trade agreement earlier this week. Wall Street futures pointed to a flat start, with U.S. investors still trying to balance recent economic data with geopolitical news.
Foreign Institutional Investor and Domestic Institutional Investor Activity
Foreign Institutional Investors (FIIs) continued their buying spree in Indian equity markets on Friday, infusing ₹ 1,009.71 crore, as per exchange data. Domestic Institutional Investor (DII) support remained robust, with them pumping in ₹9,342.48 crore. This sustained buying by both FIIs and DIIs is a positive sign, as it demonstrates deep-rooted confidence in the Indian market’s fundamentals and future growth prospects.
Also check:- Indian Equities Surge as RBI Delivers Surprise 50 BPS Rate Cut
Rupee Performance and Other Commodities
In the currency market, the Indian Rupee traded in a very narrow range against the US Dollar. Opening at 85.61, the rupee traded within a range of 85.53-85.67 during the day but strengthened on a broad basis and closed with a gain of 11 paise at 85.68/USD on Friday after RBI’s rate cut announcement. Today, it weakened by 4 paise to 85.72 against the dollar in the early trade, impacted by high crude oil prices and a strong dollar index.
Gold prices fell back on profit-taking and easing geopolitical tensions around the world. In crude oil markets, prices fell slightly ahead of the expected US-China trade talks, with Brent crude at $66.43 per barrel.
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Analysts feel that the RBI’s strong move stimulus growth, along with the favorable global sentiment, would ensure that the market atmosphere remains positive in the near term. The real transmission of the rate cuts into the economy, and their effect on a long-term outlook for corporate earnings will now come into sharper focus. Though market reaction will likely remain volatile given the current global trade war and other geopolitical events, the sentiment in favor of the Indian markets seems bullish overall, as investors look to take advantage of opportunities in rate-sensitive sectors and among firms with high earnings growth.
