Sensex, Nifty Rise After RBI Cuts Repo Rate by 50 bps and CRR to Boost Liquidity

The Nifty 50 rose 0.94 per cent to 24,982.25, while the BSE Sensex was up 0.9 per cent at 82,163.22 by 12:21 p.m. IST.

Market Update at 12:30 PM: Indian stock markets climbed on Friday, recovering from early losses after the Reserve Bank of India (RBI) surprised investors by reducing the repo rate by 50 basis points—more than anticipated—in an effort to boost economic growth. Additionally, the central bank cut the Cash Reserve Ratio (CRR) for banks by 100 basis points and shifted its monetary stance from accommodative to neutral.

Following the announcement, the Nifty 50 rose 0.94 per cent to 24,982.25, while the BSE Sensex was up 0.9 per cent at 82,163.22 by 12:21 p.m. IST. Both indices had declined nearly 0.2 per cent before the RBI’s decision.

Twelve of the thirteen key sectoral indices were trading higher. Domestically-oriented indices such as Small-Caps and Mid-Caps gained around 0.4 per cent and 0.7 per cent, respectively. Rate-sensitive sectors responded positively—real estate stocks surged 3.5 per cent, and auto stocks advanced 1 per cent amid improved growth sentiment. Financial stocks, after initial weakness, climbed 2 per cent, with HDFC Bank, a heavyweight in the index, rising 2 per cent and touching new highs.

Among individual gainers, Bajaj Finance surged 4.2 per cent after RBI Governor Sanjay Malhotra noted easing stress in unsecured loans and credit cards, though challenges remain in microfinance. 

Market Update at 10:20 AM: Indian stock markets traded flat on Friday morning as investors awaited the Reserve Bank of India's (RBI) monetary policy announcement, where a 25 basis point rate cut is widely expected. Around 9:25 a.m. IST, the Nifty 50 was marginally lower at 24,746.95, slipping 0.02 per cent, while the Sensex edged down by 0.09 per cent to 81,381.77.

Despite the cautious mood, ten out of thirteen key sectoral indices opened in the green. Broader market indices, including midcaps and smallcaps, saw gains of around 0.3 per cent, reflecting domestic investor interest.

Globally, other Asian markets remained quiet, and U.S. markets closed in the red following tensions between President Donald Trump and Elon Musk, which affected sentiment.

On the stock-specific front, JSW Energy advanced 2 per cent after it added 281 MW of renewable energy capacity to its portfolio. Meanwhile, Ashoka Buildcon gained 3 per cent after receiving a letter of intent for traffic management projects in Maharashtra.

Pre-Market Update at 8:00 AM: Indian equity benchmarks are expected to begin Thursday’s session on a flat note. As of 7:24 AM, GIFT Nifty was hovering near 24,843, indicating a slight drop of 11 points from the previous close. While Asian indices opened in the green, U.S. markets ended lower in the previous session, with all major indices finishing in negative territory.

All eyes are on the Reserve Bank of India today, where Governor Sanjay Malhotra will reveal the outcome of the Monetary Policy Committee (MPC) meeting. Investors broadly expect a 25-basis-point cut in the repo rate, which would bring it down from 6 per cent to 5.75 per cent, continuing the easing trend seen over the last two meetings.

In terms of institutional flows, Domestic Institutional Investors (DIIs) have remained consistent net buyers for the past 13 sessions. On June 5, FIIs offloaded shares worth Rs 208.47 crore, whereas DIIs picked up equities amounting to Rs 2,382.40 crore.

Indian markets closed higher yesterday with broad-based gains. The Sensex advanced 443.79 points or 0.55 per cent, settling at 81,442.04, while the Nifty 50 gained 130.70 points or 0.53 per cent to close at 24,750.90.

Asian equities saw gains following a positive phone call between U.S. President Donald Trump and China’s President Xi Jinping, which lifted regional sentiment. In contrast, U.S. indices declined on Thursday, led by a sharp fall in Tesla shares.

The Dow slipped 108 points to end at 42,319.74, down 0.25 per cent. The S&P 500 declined by 0.53 per cent to 5,939.30, while the Nasdaq dropped 0.83 per cent, closing at 19,298.45. Tesla tumbled 14.26 per cent to  USD284.70 amid continued tensions between Elon Musk and Donald Trump over U.S. tax changes, contributing to a nearly  USD150 billion market cap erosion over recent sessions.

Adding to investor worries, U.S. jobless claims rose to 247,000 last week, the highest level since October, indicating softness in the labor market.

Gold prices advanced on Friday, with spot gold rising 0.3 per cent to  USD3,361.36 per ounce, marking a 2.3 per cent gain for the week. U.S. gold futures followed suit, up 0.3 per cent at  USD3,384.40. However, spot silver dipped 1.2 per cent to  USD35.71, though it remains near a 12-year high.

For today, Chambal Fertilisers, Manappuram Finance and Aditya Birla Fashion Retail continue to remain under the F&O ban list.

Disclaimer: The article is for informational purposes only and not investment advice.