Key Reasons Why the Market Rallied on June 6

Meanwhile, the India VIX index, which measures market volatility, cooled off below 15, reaching its lowest level in over a month.

The Indian equity markets ended Friday's trading session on a positive note, with the Nifty 50 index reclaiming the significant psychological mark of 25,000, rising by 1.02 per cent. Similarly, the BSE Sensex surged by 747 points, crossing the key 82,000 level. This remarkable rally helped the Nifty 50 snap its two-week losing streak, ending the week with a gain of 1.02 per cent.

The primary catalyst behind this rally was the announcement made by RBI Governor Sanjay Malhotra, where the Reserve Bank of India (RBI) took bold steps to support the economy. The RBI cut the benchmark repo rate by 50 basis points, reducing it to 5.5 per cent. Additionally, the central bank lowered the cash reserve ratio (CRR) by 100 basis points, bringing it to 3 per cent. Along with these actions, the RBI revised its Consumer Price Index (CPI) inflation forecast down to 3.7 per cent, from the previous 4 per cent, while maintaining its GDP growth estimate at 6.5 per cent for the year ending March 2026.

This move by the RBI resulted in a strong rally in the Nifty Bank index, which surged by nearly 1.5 per cent hitting a fresh all-time high. The rally in the Nifty Bank was the sharpest single-day rise since May 12. Meanwhile, the India VIX index, which measures market volatility, cooled off below 15, reaching its lowest level in over a month.

All sectoral indices ended in positive territory, except for Nifty Media, which dipped by 1.14 per cent. Among the standout performers were the Nifty Realty and Nifty Metal indices, which rose by 4.68 per cent and 1.9 per cent, respectively. The Nifty Realty index reached a five-month high, as the rate cut from the RBI is expected to boost demand in the sector. Additionally, the broader indices also participated in the rally, with the Nifty Midcap and Nifty Small-Cap indices rising by 1.21 per cent and 0.81 per cent, respectively. The advance-decline ratio for the day was also in favor of the advances, further highlighting the strength in the market on June 6.

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