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Markets end higher as investors cheer RBI rate cut
Jun-06-2025

Indian equity benchmarks continued their strong upward momentum for the third straight session on Friday as investors cheered a 50 basis points repo rate cut by the Reserve Bank of India's Monetary Policy Committee (MPC). Following the rate cut, the key policy rate eased to a three-year low of 5.5 per cent, providing relief to home, auto and corporate loans borrowers.

Some of the important factors in today’s trade:

RBI cuts inflation projection to 3.7%: The RBI cut inflation projections for the current fiscal to 3.7 per cent from the earlier estimate of 4 per cent, as it expects core inflation to remain benign with the easing of international commodity prices. The sub-4 per cent average retail inflation projection is the lowest in recent years.

RBI rate cut boosts affordable housing sales: CREDAI President Shekhar G Patel said the RBI’s decision to cut repo rate by 50 basis points will improve consumers' sentiment, immensely benefitting mid-income and affordable housing segments, which have been struggling in the last few years.

Rupee rises against US Dollar: Indian rupee pared initial losses and appreciated against US Dollar after the Reserve Bank cut repo rate by a higher-than-expected 50 basis points to prop up growth.

Piyush Goyal proposes to develop industrial conclave for Italian businesses in India: With an aim to promote investments, Commerce and Industry Minister Piyush Goyal has proposed to develop an industrial conclave for Italian businesses in India. He said Italian companies can consider setting up manufacturing units and offices in those enclaves. 

Global front: European markets were trading mostly in red as investors awaited the U.S. Labour Department's closely watched monthly jobs report later in the day for more insight into the labor market and the outlook for monetary policy. Asian markets settled mixed on Friday despite the leaders of the U.S. and China agreeing to further talks aimed at reaching a deal. 

Finally, the BSE Sensex rose 746.95 points or 0.92% to 82,188.99 and the CNX Nifty was up by 252.15 points or 1.02% to 25,003.05. 

The BSE Sensex touched high and low of 82,299.89 and 81,140.11 respectively. There were 28 stocks advancing against 2 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 0.91%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were Realty up by 4.74%, Metal up by 1.56%, Auto up by 1.50%, Consumer Discretionary up by 1.38% and Consumer Durables up by 1.30%, while Capital Goods down by 0.30% and Industrials down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 4.93%, Axis Bank up by 3.15%, Maruti Suzuki up by 2.64%, Bajaj Finserv up by 2.36% and Eternal up by 2.10%. On the flip side, Bharat Electronics down by 0.76%, Bharti Airtel down by 0.39%, Tata Steel down by 0.32% and Sun Pharma down by 0.20% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has held three meetings within a short span of 35 days with the European Commissioner for Trade Maros Sefcovic with an aim to give an impetus to the reposed negotiations for a free trade agreement (FTA). The first and the second meetings between Goyal and Sefcovic were held on May 1, 2025 and May 23, 2025 in Brussels, while the third meeting concluded on June 2, 2025 in Paris.  

The minister said that India has already signed similar agreements with four-European nation bloc EFTA and the UK. The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland. Now, India is in the process of concluding the negotiations with the 27-nation bloc European Union.

Goyal also said he is working with Italy and the EU for a ‘very’ strong and mutually beneficial FTA. He said ‘we are making rapid progress on the very vibrant FTA which would open opportunities for businesses of both the sides.’ On India-Italy bilateral trade, he said it's ‘low and sub-optimal’ and both sides need to work to boost the two-way commerce. Currently it stands around $15 billion in goods. He added that huge potential is there to boost bilateral trade.

The CNX Nifty traded in a range of 25,029.50 and 24,671.45. There were 46 stocks advancing against 4 stocks declining on the index.   

The top gainers on Nifty were Shriram Finance up by 5.46%, Bajaj Finance up by 4.90%, JSW Steel up by 3.56%, Axis Bank up by 3.15% and Maruti Suzuki up by 2.78%. On the flip side, HDFC Life Insurance down by 0.87%, Bharat Electronics down by 0.66%, Bharti Airtel down by 0.46% and Sun Pharma down by 0.13% were the top losers.  

European markets were trading mostly in red; France’s CAC fell 2.42 points or 0.03% to 7,787.85 and Germany’s DAX lost 34.59 points or 0.14% to 24,288.99, while UK’s FTSE 100 increased 1.35 points or 0.02% to 8,812.39.

Asian markets settled mixed on Friday, amidst concerns over US-China trade relations, and on caution ahead of US jobs data. Lingering geopolitical tensions and domestic economic challenges in various countries have added the mixed performance in local indices. Japan's Nikkei settled higher supported by the gains in export-driven stocks amidst weaker local currency yen. Nikkei registered a gain of about 0.4% for the week. Stock market of Indonesia and South Korea were closed for a holiday. 

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,385.36

1.26

0.04

Hang Seng

23,792.54

-114.43

-0.48

Jakarta Composite

--

--

--

KLSE Composite

1,516.79

-1.33

-0.09

Nikkei 225

37,741.61

187.12

0.50

Straits Times

3,934.29

16.60

0.42

KOSPI Composite

--

--

--

Taiwan Weighted

21,660.66

-13.77

-0.06
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