Sensex Gains 800 Points, Nifty Hits 25,000 After RBI Cuts Rate By 50 bps, Nifty Bank At Record High
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Indian benchmark indices are set to trade cautiously on Friday, as investors brace for a mix of domestic and global triggers
Sensex Today: The benchmark equity indices staged a sharp rebound on Friday, with the Sensex soaring over 1,000 points from its intraday low and the Nifty crossing the crucial 25,000 mark. This rally was driven by the Reserve Bank of India's (RBI) larger-than-expected 50 basis points repo rate cut and fresh liquidity-boosting measures.
At 11:51 am IST, the Sensex was up 760.40 points, or 0.93 percent, at 82,202.44, while the Nifty gained 251.10 points, or 1.01 percent, to 25,002.00. Market breadth remained positive, with 1,955 stocks advancing, 1,407 declining, and 145 unchanged.
Key drivers of the rally:
RBI's surprise 50-bps rate cut
The central bank cut the repo rate by 50 basis points to 5.5 percent — the lowest in three years — exceeding most analyst expectations. The RBI cited recent moderation in inflation and the need to bolster consumption and investment as the rationale for the move. With GDP growth slipping to a four-year low of 6.5 percent in FY25, the sharper rate cut is expected to reduce borrowing costs for both consumers and businesses, boosting demand in sectors like housing, autos, and consumer durables.
CRR cut lifts banking stocks
The RBI also reduced the cash reserve ratio (CRR) by 100 basis points, to be implemented in four tranches of 25 bps each, bringing it from 4 percent to 3 percent. This measure is expected to inject around ₹2.5 lakh crore into the banking system over the next few months, spurring a rally in banking stocks on hopes of stronger credit growth and improved net interest margins.
'This is a prudent response to the current environment of contained inflation and improving economic growth," said Sanjay Daga, CEO and MD of Anex Advisory. 'The CRR cut will enhance liquidity and provide a positive backdrop for sustaining momentum across sectors."
Global Cues: US-China Trade Talks and Asia-Pacific Gains
Asian markets were buoyant in early trade after US President Trump and Chinese President Xi held a 90-minute phone conversation on Thursday, reigniting hopes of a resolution to their trade dispute. Trump described the talks as 'very good" and hinted at a positive outcome for both nations, with officials set to resume negotiations soon.
In Asian markets, Japan's Nikkei gained 0.31%, Topix rose 0.45%, Kospi advanced 1.49%, and Australia's ASX200 inched up 0.03%.
US stock futures were steady ahead of a key jobs report that could provide fresh insight into the American economy's health. Overnight, Wall Street indices closed lower, with Tesla shares dragging down broader markets. The S&P 500 lost 0.53%, the Nasdaq fell 0.83%, and the Dow Jones slipped 0.25%.
Meanwhile, the European Central Bank (ECB) reduced its marginal lending rate by 25 basis points to 2.4%—the lowest level since late 2022 and in line with market expectations.
Beyond the RBI's MPC announcement, investors will also be monitoring India's foreign exchange data, the US unemployment rate and non-farm payrolls data, and the Euro area's Q1 GDP growth estimate.
First Published:
June 06, 2025, 08:53 IST
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