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Indices magnify gains as RBI projects inflation at 3.70% in FY26
Jun-06-2025

Domestic equity indices magnified their gains in late morning deals as market participants indulged in enlarging their positions. Frontline gauges surged above their crucial 82,100 (Sensex) and 24950 (Nifty) levels. Hectic buying in Bajaj Finance, Axis Bank, Maruti Suzuki, Bajaj Finserv and HDFC Bank companies’ stocks helped the markets to magnify their gains. Sentiments got boost after the Reserve Bank of India (RBI) announced larger-than-expected rate cut. RBI reduced repo rate by 50 bps to 5.50%. For the full year FY26, the RBI has projected headline inflation at 3.70%, lower than the 4% forecast made in April. On the BSE sectoral front, traders were seen pilling up positions in Realty, Bankex, Auto, Consumer Disc and Utilities, while selling was witnessed in Telecom, Capital Goods, Industrials and Healthcare. 

On the global front, Asian markets were trading mixed as investors assessed the phone call between U.S. President Donald Trump and Chinese President Xi Jinping. Trump and Xi agreed that officials from the U.S. and China will meet soon to continue negotiations aimed at ending the ongoing trade war. Back home, banking industry related stocks were trading higher as RBI announced a phased 100 basis points (bps) cut in the Cash Reserve Ratio (CRR). The CRR will be reduced from 4% to 3% in four tranches of 25 bps each, beginning September 2025. The move is expected to infuse Rs 2.5 lakh crore into the banking system over the coming months, significantly enhancing banks' lending capacity.

The BSE Sensex is currently trading at 82155.31, up by 713.27 points or 0.88% after trading in a range of 81140.11 and 82189.93. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.43%, while Small cap index up by 0.31%.

The top gaining sectoral indices on the BSE were Realty up by 4.30%, Bankex up by 1.30%, Auto up by 1.05%, Consumer Disc up by 1.01% and Utilities up by 0.66%, while Telecom down by 0.34%, Capital Goods down by 0.27%, Industrials down by 0.19% and Healthcare down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 4.21%, Axis Bank up by 3.18%, Maruti Suzuki up by 3.11%, Bajaj Finserv up by 2.64% and HDFC Bank up by 2.13%. On the flip side, Tata Steel down by 1.49%, Bharat Electronics down by 0.77%, Sun Pharma down by 0.75% and HCL Technologies down by 0.17% were the few losers.

Meanwhile, with aim of fostering bilateral economic relations and encourage cross-border investments between India and Kyrgyz Republic, Indian Finance Minister Nirmala Sitharaman and Kyrgyz Foreign Affairs Minister Zheenbek Kulubaev Moldokanovich have signed a protocol for enforcement of a bilateral investment treaty. The Bilateral Investment Treaty (BIT) signed on June 14, 2019, in Bishkek, between the Government of India and the Government of the Kyrgyz Republic, has entered into force with effect from June 5, 2025. The finance ministry has said that the new BIT replaces the earlier agreement enforced on May 12, 2000, ensuring continuity in the protection of investments between the two nations. The ministry has emphasized the significance of the BIT in strengthening bilateral economic relations and fostering a secure and predictable investment environment. It further added that the BIT aims to promote and protect the interests of investors of either country in the territory of the other country.

Some of the key features of the BIT include an emphasis on sustainable development in the preamble and removal of the most favoured nation (MFN) tag. According to finance ministry’s release, BIT contains two types of exceptions, general exceptions and security exceptions, to carve out a policy space for the State. The general exceptions include, among others, the protection of the environment, ensuring public health and safety, and protecting public morals and public order. Further, in order to provide investors with alternate dispute resolution mechanism, the BIT has calibrated the Investor-State Dispute Settlement mechanism with mandatory exhaustion of local remedies.

In order to retain sufficient policy space with the government in matters relating to local government, taxation, government procurement, services supplied in the exercise of governmental authority, and compulsory licenses, the BIT has excluded such matters. The treaty balances the investor rights with the sovereign regulatory powers of both countries and reflects a shared commitment to create a resilient and transparent investment climate. It is expected to further encourage cross-border investments and deepen economic cooperation between India and Kyrgyzstan.

The CNX Nifty is currently trading at 24969.90, up by 219.00 points or 0.88% after trading in a range of 24671.45 and 24993.25. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Shriram Finance up by 4.58%, Bajaj Finance up by 4.21%, Maruti Suzuki up by 3.00%, Axis Bank up by 2.99% and JSW Steel up by 2.77%. On the flip side, Tata Steel down by 1.54%, Bharat Electronics down by 0.72%, Sun Pharma down by 0.71%, Nestle down by 0.40% and HCL Technologies  down by 0.27% were the top losers.

Asian markets were trading mixed; Hang Seng declined 77.23 points or 0.32% to 23,829.74, Shanghai Composite weakened 1.87 points or 0.06% to 3,382.23 and Taiwan Weighted lost 23.87 points or 0.11% to 21,650.56. However, Straits Times rose 4.14 points or 0.11% to 3,921.83 and Nikkei 225 surged 132.76 points or 0.35% to 37,687.25.
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